France And Germany Reach Agreement On $2.8 Trillion European Bailout Fund, EU Diplomats Say

As large as the figure sounds, it might not be enough, and France can now officially kiss their AAA rating goodbye, according to one think tank who stated that almost $6 trillion will be needed:

• Think Tank Says Bailout Fund Will Need $6 Trillion And France Will Lose AAA Rating

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UK Guardian

Reprinted with permission.

France and Germany have reached agreement to boost the eurozone's rescue fund to €2tn (£1.75tn) as part of a "comprehensive plan" to resolve the sovereign debt crisis, which this weekend's summit should endorse, EU diplomats said.

The growing confidence that a deal can be struck at this Sunday's crisis summit came amid signs of market pressure on France following the warning by the ratings agency Moody's that it might review the country's coveted AAA rating because of the cost of bailing out its banks and other members of the eurozone. The leaders of France and Germany hope to agree a deal that will assuage market uncertainties or, worse, volatility, in the run-up to the G20 summit in Cannes early next month.

France would now have to pay more than a percentage point – some 114 basis points – over the price paid by Germany to borrow for 10 years as the gap between the two country's bond yields widened to their highest level since 1992.

On Tuesday stock markets and foreign exchanges reacted uneasily to the damping down of expectations, notably by Berlin, about the prospects of a full-scale deal although EU diplomats close to the talks say the Franco-German agreement covers boosting the financial firewalls for eurozone members to withstand the threat of a "credit event" or sovereign debt default in weaker countries.

This takes two forms. First, the main bailout fund, the European financial stability facility, will be given additional levers enabling it to offer first-loss guarantees for bondholders, be they private or public. Senior diplomats say this will deliver a fivefold increase in the fund's firepower – giving it more than €2tn compared with the current €440bn lending capability. The EFSF will in effect become an insurer, thereby overcoming European Central Bank resistance to the idea of turning into a bank.

Second, Berlin and Paris have agreed that Europe's banks should be recapitalised to meet the 9% capital ratio that the European Banking Authority is demanding after its re-examination of the exposure levels of 60 to 70 "systemic" banks. The EBA has marked these exposures much closer to current market values.

It is said that the overall recapitalisation required will be closer to €100bn rather than the €200bn talked about by Christine Lagarde, IMF managing director, and others. French and German banks, senior sources said, can meet the new capital ratio target on their own without recourse to state funds, let alone the EFSF. Other countries' banks, however, may need financial support from the state or the EFSF.

Berlin and Paris are also said by those close to the negotiations to be edging nearer to agreeing on the increased scale of private sector involvement in the second rescue package (€109bn) for Greece. This was set at a voluntary 21% "haircut" in the July package but, under worsening overall economic conditions and a likely restructuring of Greek debt, Germany has been pushing for losses of up to 50%. France, backed by the ECB, has resisted the idea, while EU officials have clearly indicated that a range of 30 to 50% is being considered.

Josef Ackermann, Deutsche Bank's outgoing chief executive, held talks on Tuesday with senior EU officials on behalf of disgruntled bondholders. But there are signs that they are reluctantly accepting the need for bigger "haircuts" under the comprehensive plan to resolve the sovereign debt crisis. "We're not talking about a unilateral, one-sided restructuring of Greek debt," the diplomats said ahead of the imminent arrival of the full report from the troika of ECB, IMF and European commission on Greece's compliance with the bailout terms.

Senior EU officials admit that technical details remain to be settled. Some of these will be agreed by finance ministers who meet on Saturday, while others will await final agreement in the run-up to the G20 summit in Cannes. "It's a huge agenda," senior officials said of the plan of work for the summit. "But there will be a number of breakthroughs."

They added: "We thought the [Greek] package of 21 July was a big step, but obviously it was not enough and now we're pretty confident that markets will say that these people really mean what they say and will ensure stability."

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DB here.  France will lose undoubtedly their AAA rating as a result of the bailout, and EU officials are still in denial about the amount necessary to recapitalize the region's ailing banks.  See this story from PIMCO's El-Erian:

• PIMCO's El-Erian Drops The F-Bomb: "French Banks Are Down To 1% Capital, Institutional Panic Underway"

Comments

[DailyBail]

FRANKFURT (MarketWatch) — France found itself at the center of the European debt crisis Tuesday, a day after Moody’s Investors Service fired a warning shot over the durability of the nation’s Aaa credit rating due to worries about the cost of bailing out fellow euro-zone members or French banks.

http://www.marketwatch.com/story/france-in-firing-line-as-crisis-weighs-on-core-2011-10-18

[DailyBail]

RICHARD KOO: There's Only One Solution That Can Save Europe Now

http://www.businessinsider.com/richard-koo-its-time-to-go-nuclear-heres-how-to-save-europe-2011-10

[anonymous]

Of course, they HAVE to keep the ponzi scheme going....keep the illusion of the wholes sytem running, even though the 99%ers all know its a giant lie.

[Mars]

GREECE REVIVAL
..starring Nicolas (John) Sarkozy pursuing rich girl Angela (Olivia) Merkel

http://www.youtube.com/watch?v=edffynKrkaE

I got chills, they're multiplying and I'm losing control
'Cause the money you're supplying....It's electrifying
You're the one that I want
You're the one that I need
Oh yes indeed
I better shape, cause you need a man
who can keep you satisfied

[hungry4food]

Be very careful when wishing for an end to the Federal Reserve ... and heres why .....

With the BRIC nations and OPEC calling for an End to the dollar as World trade currency , and wanting to replace it with the EURO and told the European Union they would bailout the Union , before the Federal Reserve stepped in the next week with a Plan for the bailout , is the leverage of the EU bailout and if the BRIC nations or the Federal Reserve and the USA do the bailout an argument that rests with the decision of if the Federal Reserve that is based in London willing to give up its position as world trade currency and the alliance it holds with the USA if the BRIC nations were to become the debt holder of the European Union and this divide the USA and Europe's alliance for the first time since World War 2 ?????
I do believe this is what is playing out in Europe right now and why they chose to not go with the BRIC nations bailout plan over the Federal reserves , and as long as the European Union will not give up the alliance with the USA they can continue to be the World trade currency till such a time that the BRIC nations determine that they cannot convince the Euro Zone to transition , then the BRIC nations threaten to cutoff supply to the European Union next year when this Debt bailout issue comes up again ,and at that point if the European Union decides that losing the supply of durables that the BRIC nations supply to them is not worth the alliance with the USA thats when the USA will be cutoff from World Resource supply as the BRIC nations begin to formally reject the dollar not just as the World Trade currency but as a medium of exchange all together for the trade for world supply .
This is what happened to Iceland in 2008 when the world would not take their currency in exchange for durable goods and this would cause the USA to hyper inflation to the point of collapse almost immediately prompting a Nationalization of the Energy supply first because of the rejection of the dollar at the OPEC markets creating the domino effect on everything else .

Here are the articles referencing the European Union Bailout that would have replaced the dollar and the Federal Reserve as the worlds Trade Currency , and I think they Caved into this loss and decided to instead keep the alliance with the USA and told the BRIC nations the European Union will not end the alliance with the USA and the Dollar as Trade currency , so we are now entering a dark period of what will the BRIC nations do next , and OPEC lets not forget OPEC and the Idea that Iran now runs OPEC .
http://www.planbeconomics.com/2011/01/05/why-is-china-propping-up-eu-debt/
http://www.zerohedge.com/article/china-says-it-will-bailout-insolvent-european-countries

Here are articles of the BRIC nations and even the IMF calling for a end to the dollar as Trade currency . It is amazing that the Free markets are still operating with any level of confidence to take risk .
http://online.wsj.com/article/SB123780272456212885.html

http://news.xinhuanet.com/english/2009-04/01/content_11109506.htm

http://www.telegraph.co.uk/finance/currency/8316834/International-Monetary-Fund-director-Dominique-Strauss-Kahn-calls-for-new-world-currency.html

Head of Euro-Zone Bailout Fund

http://www.spiegel.de/international/europe/0,1518,783056,00.html


‘The Crisis Will Be Over in Two to Three Years’ this is happening because the 3 biggest nations of the BRIC nations , OPEC , Russia and China are backing the EU Eurozone with durable supply and making the dollar virtually worthless too the EU because the USA has nothing but paper dollars going out the door to the world while the BRIC nations supply everything and they are calling for an end to the dollar as world reserve currency because of this and are systematically destroying the dollars Position as trade currency and our Government is allowing this too happen to make the USA collapse into a 3rd world country !!!

Former IMF Director Witteveen Wants The BRICs To Bail Out The PIIGS , this will lead to more and More countries not willing to take dollars and eventually by Proxy the Dollar will not be excepted in the world market place . Hyper Inflation will be Our New enemy in addition to many others .


http://www.businessinsider.com/former-imf-director-imf-will-provide-solution-to-eu-debt-crisis-2011-8


http://article.wn.com/view/2011/08/18/FACTBOX_Venezuela_moves_reserves_to_BRIC_nations/

http://www.survival-preps.com/index.php?topic=1031.0

The Agenda – Grinding America Down

http://www.youtube.com/watch?v=xQf_QfitmKE

Now That U.S. Government Debt Has Been Downgraded, The Rest Of The World Is Calling Even Louder For A New Global Currency
http://endoftheamericandream.com/archives/now-that-u-s-government-debt-has-been-downgraded-the-rest-of-the-world-is-calling-even-louder-for-a-new-global-currency

How America Could Collapse

http://www.alternet.org/story/151997/how_america_could_collapse/?page=2

The Only thing thats keeping the Dollar in place as world trade currency right now is the lack of will between the European Union to total commit to a full out alliance with the BRIC nations which would end the Dollar as world trade currency and would END the Dominance the Federal reserve and the London based organization that runs it if this divide between the European union were to take place with the USA by their alliance with the BRIC nations . Once the BRIC nations get tired of this game and tell the European Union they will not take Euros or Dollars and longer in exchange for BRIC nations durable goods , thats when we will see all Hell break loose and its going to take a Leader that can make sure the USA has the footing to withstand this kind of a event or FREEDOM and the right of Liberty will be threatened in the USA with Anarchy for lack of Needed supply , as the world supply will be inaccessible because of the world rejection of the dollar .
We need to stand back up an Industrial base that can make the needed supplies if and when the world cuts the USA off from access of the BRIC nations durable goods , and they will they have been planning to do this ever since we developed them into a SELF RELIANT position with USA consumer debt , Mitt Romney you helped to do this when you were Out sourcing in the 1990s .


here is a arguement against the idea of a BRIC European Union Bailout


A bail-out by Bric nations would leave Europe even worse off
http://www.ft.com/intl/cms/s/0/88c5c38e-e515-11e0-9aa8-00144feabdc0.html#axzz1b91BReM6

The Absurdity of a BRIC Bailout of Europe
http://www.financialsense.com/contributors/michael-pettis/2011/10/06/absuridity-bric-bailout-europe



This is a Interesting link that simulates the S&P presidents same timeline of wanting to end the Dollar as trade currency ,
U.N. calls for replacement of U.S. dollar
http://www.wnd.com/?pageId=109774


Check this Link out , it talks about how the President of the S&P is calling for the death of the US dollar in 2009 and Obama’s Chair of the SEC is there and they all are on board ,

BILDERBERG FINANCIERS AT TEL AVIV MONETARY MEETING

http://disc.yourwebapps.com/discussion.cgi?disc=149495;article=124696;title=APFN

S&P CEO Deven Sharma This is a guy who was a key contributor at the 2009 Bilderberg Summit that organized 120 of the world’s richest men and women to push for an end to the dollar as the global reserve currency. Mary Shapiro, OBAMAS SEC head was there , and Now Obama has the SEC Investigating the S&P , I am sure you heard , but don’t you thin with the charge of Treason staring at the S&P president by Obama , But Obama was there at the meeting 2 years ago and agreed to this Plan to ditch the US dollar , Obama can’t Hold the Office of the Presidency and be Implicated in this , so he is Back Stabling the S&P President CEO Deven Sharma so I think this is where we Need to concentrate the Pressure on the S&P guy because he ain’t going down without Obama , and the harder we Push the S&P guy the harder he goes after Obama , any thoughts ???

I mean read what they S&P guy said here , Michael Rourke saw this and about blew a cork man , and Obama is head deep in this but has the cover right now with the appearance of SEC investigation , but its all a shame and we need to figure out who we can turn this information onto that can turn the heat up on Prosecution of the S&P guy to get him to implicate Obama in this plan to crash the dollar and the USA with it .
This article has this Paragraph in it and we can even Bring SOROS into this too , the S&P guy will betray SOROS TOO if he thinks hes going down for Obama and SOROS plus a whole bunch of other ELITES that were planning our demise right under our LIVES , what a bunch of crap .

http://seekingalpha.com/article/285737-the-rise-of-financial-terrorism

[T]hrough his writings on “competitive strategy” S&P CEO Sharma considers the United States the PROBLEM in today’s world, operating with what he implies is an unfair and reckless advantage. The brutal reality is that for “globalization” to succeed the United States must be torn asunder . . .

The Scam against the USA was all found here , the Author is a VIP LIBERAL LAWYER and she is exposing the truth against Obama so thats a big deal .

http://webofdebt.wordpress.com/2011/08/18/sp-and-the-bilderbergers-all-part-of-the-plan/

[Howard T. Lewis III]

Lots of wake up info. Innovation and discovery takes time, facilities, and money. With all major industries in decline in the U.S over the past 12 years or more (Except gaming the Stock Market or outright looting), printing more money is the only way for the U.S. to avoid collapse. All those purchases of Walmart, Kmart, etc.,Made in China leaves us with broke and unemployed. Then Bush41 deregulated and spawned NAFTA, and the rest is history. Don't expect most anyone in top government positions to vote to stop the train.

They sold out to the owners of the 'world court of the world' in Israel to get reelected. No, that is not God returned to earth. It's the Council on Foreign Relations, the Grand patron of freemasonry(QofE), and the Rothschilds. The S&B society, with Bush41 at the helm, has been a pirate enterprise loyal to the British crown since the early 1700s when William of Orange was run off the throne by the Germans, today's England royal family. They ARE a pack of vicious, stupid thugs, even if you can not imagine the queen going to the bathroom.

Rockefellers wanted to move the center of world trade from London to New York city. All these attacks (Including HAARP) benefitted the old world kingdoms because Japan is ruined and the mewling suckers in D.C. act out their Benedict Arnold fantasies to compliment their cheating wives. Thus, the U.S. is being mismanaged into the ground. Dump the Fed, and back up attempts to arrest N.Y. state and U.S. congressmen and SCOTUS and The presidential administration.

[learning2]

This is just another rumor pie-in-the-sky to distract. There is NO money for bailout. ZeroHedge.Com has great coverage about what can and cannot be done and is usually on the front lines when it comes to facts and rumor. What a circus!

But, the reason for my comment - yes, off topic.

I think Bush Jr is going to get very upset with this photo. Remember when he tried to give her a shoulder message at that meeting? Really creepy...So is this photo...

When do we bring down all the psychopaths in power????? please, sooner than later.