Daily International Headlines

Inflation has picked up in October, after a lull last month. The consumer prices rose 0.2% over the month and 2.3% year on year. In September, inflation had declined surprise of 0.1% (+2.2% yoy), mainly due to seasonal price reductions observed at the end of the summer tourism. This month, it is especially clothing, food and tobacco prices shoot up.

The clothing and footwear (+2.2% over one month), suffer from the end of traditional promotions and balances of the summer.

Creditor banks in Greece will have to accept losses "substantial" in the new bailout of the country, warned Saturday that the European Ministers of Finance. Last night, the central bankers of the euro zone had "agreed to say that we had to have a substantial increase in the contribution of banks" in the form of a depreciation of their claims, said the leader of European finance ministers, Jean-Claude Juncker.

• Discount of up to 60% of the Greek debt

According to diplomatic sources, the ministers agreed to effectively negotiate with the banks at a discount of "at least 50%" against a target of 21% decided on July 21 with the banking sector. They thus de facto endorsed the conclusions of an expert report which was presented by the troika of donor funds in Greece (EU, ECB and IMF).The paper believes that a discount of 50 or 60% hope to stabilize Greece without having to increase in the amount of gigantic international loans that have already been promised.

A "discount" is the term used in relation to the financial depreciation of the value of loans taken by creditors in this case private banks and investment funds that hold government debt. A discount of 50% borne by the private sector, the second program of financial support pledged July 21 to Greece, however, should be slightly revised upwards with government loans (Europe and IMF) to 114 billion euros, against 109 billion euros.To maintain the envelope of 109 billion euros unchanged, it would bring the discount to 60%, according to calculations by experts.

• Recapitalization of banks to the tune of 108 billion euros

The question is whether the banks that have so far dragged its feet to give the pot, will accept a negotiated settlement does not pass through a default of Greece. In return for the effort required on the Greek claims, there are plans to recapitalize banks in Europe. Following a meeting of EU finance ministers, this Saturday, in preparation for the summit Sunday, no agreement had been finalized on this point, due to the persistence of disputes.

"We have made some progress on the banks" and "we have laid the groundwork for an agreement" which will still be subject to "discussions between heads of state" and called for European governments to meet in summit Sunday said Swedish Finance Minister Anders Borg. Countries of the European Union are considering a recapitalization of its banks to the tune of 107 or 108 billion euros to help them cope with the crisis, has also said a source familiar with the matter.

But according to European diplomats, "there is no agreement on the recapitalization, it gets stuck a little payday advances." According to one of these diplomatic sources, "Spain insists on having a comprehensive, not only on the recapitalization of banks but also on strengthening the European Financial Stability Fund (EFSF)." On the other hand, "the ministers are trying to agree on the minimum capital."The European Banking Authority (EBA) has proposed that banks reach a level of capital of 9% by mid-2012. A diplomat acknowledged that some countries in the viewfinder of the markets, like Italy, Spain or Portugal, feared that the recapitalization will further undermine public finances.

• The Fund will not support a bank

Moreover, the French proposal to grant a banking license to the Fund support the euro area (EFSF) so he can refinance with the European Central Bank "is no longer on the table," said Minister Dutch Finance Jan Kees de Jager. Only two options are being discussed to increase the firepower of the device, he told reporters Saturday.These two tracks on the agenda now that the mechanism acts as a partial insurance of the public debt of countries in difficulty or higher participation of the IMF to the device, according to a German government source. But there is "significant differences between countries" on the issue, said Jan Kees de Jager.

How to leverage the capacity of the EFSF was the main sticking point between Berlin and Paris at the approach of the EU summit. France, worried about its budget deficit and are "triple AAA" prefer tap into the existing European funds, starting with the ECB. Germany, also sensitive to the separation of powers as inflation risks, refuses anything resembling a crisis by printing money in Europe.France was not only to advocate the involvement of the ECB, arguing that this system worked very well in the United States or Great Britain. She was supported by Spain, Italy or Belgium.

The European Relief Fund currently has a lending capacity of 440 billion euros, part of which is already committed for Ireland and Portugal. This envelope is considered insufficient to prevent contagion of the debt crisis in countries as large as Italy and Spain, increasingly in the firing line of credit rating agencies.European countries negotiate so hard for weeks on the best way, via a "leverage" to multiply by up to five response capacity of the Fund's financial debt of fragile countries.

(With agencies)

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"The euro is a rock against the crisis. "This declaration of Gylfi Arnbjornsson, President of Iceland's largest union, released in turmoil in the euro area, out of place. "While a small floating national currency increases the flexibility and affects employees," he insists. Bryndis, she does not believe more in the EU and the euro area. "It does not work. The crown, however, allowed us to emerge quickly from the crisis, "said the young woman, who works in a bookstore, very committed to the sovereignty of his country. These two strong views illustrate the gap between pro-and anti-Europe.

Iceland began on June 27 last formal negotiations to enter the European Union. At the end, Icelanders will vote in a referendum.The challenge for the small island in the far north that is just three years of severe recession, is to join the single currency.

The debate in Reykjavik is far from settled, including the center-left coalition government, like the Minister of Economy Social Democratic supporter of the euro and its counterpart of Finance defends the virtues of the crown.

"The devaluation of over 40% has boosted the competitiveness of our exports. The gain exceeds the final cost. Unemployment would have been much worse, "says Green Minister Steingrimur Sigfusson. With two key economic sectors: aluminum and fishing account for 80% of exports. In this land swept by the waters and winds so imposing nature, the farm lobby and fishing make their voices heard. They reject the decisions of Brussels and its quotas.Yet, in fact, Iceland is already integrated into the European Union.

The case "Icesave" three years ago that poisons relations with Great Britain and the Netherlands also maintained Euroscepticism. The State has spent 15% of GDP to save its national banks but refused to compensate the foreign customers of the bank Icesave, bankruptcy. An early decision of the European Court of Justice could force Reykjavik to set the slate of 8 billion euros. "The bank Landsbanki has the means to repay by selling its assets revalued since the crisis," said the minister.

Indebtedness

Three years to regain control of the IMF, the economy drastically, radical restructuring of the banks have put the country on track for growth, helped by a crown devalued on line pay day loans.In the field, if the maintenance of a welfare state and the strength of social ties, related to the geography of the place and its small population, have reduced the impact, the crisis is far from over. Reflecting Hildigunnur Sverrisdottir, 35, architect, married with three children. "We are living a nightmare, every month, our debts pile up, we have no visibility and perspective," she confesses.

This family alone synthesizes all the symptoms of the crisis Iceland: Hidlig lost his job after the explosion of the housing bubble, the couple bought a house at full price. They chose a loan in foreign currency – yen, Swiss franc and euro – more attractive as deemed stable and offering lower interest rates. This not to mention local specificity to index mortgages on inflation, which reached its highest, 18%.Result, many Icelanders have seen the value of their loans soar. "In my generation, everyone has lost an average of 10 million crowns," says Hubert Koziet, who suffered a pay cut and an increase of one third of its credit.

Unable to repay their credit, Hidlig and her husband were offered a government program, reserved for owners 13 .500, which is to cap credit 110% of the value of the dwelling and convert crown. "We do not know what to do, we are still negotiating with our bank, we do not rule out leaving the country. Many of our friends, architect, engineer, accountant … went to Denmark and the United States. "

Counter the brain drain and attract new investment, are the future challenges for sustainable growth in Iceland. Because the economy remains crippled by capital controls and political instability.Ironically, today is not money that is lacking in the small island – banks are full of capital that the Icelanders and businesses could exfiltrer abroad – but it suffers from a lack of confidence in the future and the political elites.

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Phone calls at the highest level, video conferencing, round trips of crisis, the climb to the top of the euro appears more frantic Sunday every hour that passes. Nicolas Sarkozy made last night on an emergency trip from Frankfurt to tighten rope with Angela Merkel. But in the final meters, it is the Italy of Silvio Berlusconi could give a cold sweat in the common currency.

Ten days after his trip to Berlin, Nicolas Sarkozy visited on Wednesday in the financial capital of Germany for a further meeting with Angela Merkel. Officially, he came to pay tribute to Jean-Claude Trichet, who drew his bow at the head of the ECB. But in practice, to lock an agreement soon with the Chancellor. After a two-hour meeting nothing has filtered. The two leaders were released separately without comment. They looked tense.They rushed into their cars, to use the plane to Paris and Berlin.

The key issue – the appropriate role or not the European Central Bank in the financing of sovereign debt in support of the EFSF, the bailout funds in the euro area – remains still pending. France is clearly, even amending the Treaties. Germany has always been against the name of financial orthodoxy and independence considered sacrosanct by the ECB.

The question plagues the Paris-Berlin for months. At one hundred hours of a summit that everyone wants to believe decisive, it is especially doubt the strength of the Franco-German base on which the 17 partners of the euro and the 27 EU countries have establish a bulwark Sunday against the crisis and contagion."Monday morning he will have the markets, the United States, China and the IMF are convinced that Europe has a plan, a European official placed loose in the heart of the discussion. If there is no agreement, each European country will be reduced to playing individual survival. "

A "Mr Euro"

As a result, dramatically raised the bar for Sunday. Until recent days, Europeans thought solve problems in sequence: first Greece, then the recapitalization of banks with the strengthening of EFSF and economic governance coupled with greater budgetary discipline and finally the start of construction new treaties to push European integration. In an emergency, they say in Brussels, the Heads of State and Government will instead have to treat the whole as a whole.

Essential parts are already in place.Athens will release in the coming days with an 8 billion euro. She will spend the deadlines in November and avoid bankruptcy catastrophic for the euro. Unless dramatic, France and Germany also agreed on the recapitalization of banks. Governance side, it seems certain that the European Council President Herman Van Rompuy become "Mr. Euro ". The terms of the collective fiscal discipline and above the level of checks carried out by teams in each capital Brussels are still under debate. The case directly related to the revision of treaties, also raises serious questions of national sovereignty.

But against the backdrop of persistent differences between France and Germany regarding the bailout fund and the role of the ECB, it remains to organize the famous "against fire" in the euro area, ie to prevent the spread of the fire."It's reassuring to calm the Greek home. But that does not answer the real question posed by the market: what happens if other countries are in turn earned by the flames? ", Said the European official.

After degradation of Spain by Moody's and uncertainty on France by Standard & Poor's is Italy, the third power of the euro might come to haunt the summit. "Nobody talks about it openly, but everyone has the scenario of an Italian debacle in mind," said one senior source. After public criticism that its inertia creates the Italian employers, Silvio Berlusconi could be claimed Sunday accountable by their peers, they say in Brussels.

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Danone has published a quarterly revenue in line with expectations. At first, in the absence of good surprise, the valuation of Danone can call. The title pays more than 14 times earnings expected for 2012, while the CAC 40 builds about 8.2 times the estimated profit for 2012. "This is justified from the point where Danone is growing higher than the overall economy. The group offers products with high added value for the elderly and babies. It is well positioned in emerging markets, "says one fund manager.

We must also put into perspective the value of Danone with that of Nestlé. The Swiss giant capitalizes 15.6 times the expected result next year. The market welcomed by the superb performance in all segments, including the brilliant success of Nespresso, the subsidiary that specializes in luxury coffee.

Danone is perceived by the market as a growth and not as a "value", not valued due to lack of development prospects no fax pay day loans. The situation of Danone in terms of profitability is satisfactory. Operating margin exceeded 14% after the first half. Better still, it exceeds 20% in Asia.

Possible sale of the water industry

Still, Danone must win the market with new projects. In recent years, Danone has refocused on the markets of healthy nutrition and health. The group is poised to sell its water sector, reports Bloomberg. It is in talks with the Japanese Suntory. The water industry is about 17% of sales of Danone. Growth and profitability are slightly lower than the other branches of the group.Meanwhile, Danone could strengthen its nutrition industry with an acquisition.

In any case, it will not be possible to create value with a takeover bid. When Danone had been rumors of takeover by Pepsi, leaders such as politicians had split from a multitude of arguments, economic patriotism.

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In the wake of the Board, who act the dismantling of Dexia between France and Belgium, Pierre Mariani, managing director of the bank and its president, Jean-Luc Dehaene, have defended their record this morning before the press and financial analysts. The two men had taken the reins of the Franco-Belgian bank in the fall of 2008, after his first save. They provide regret today that the crisis in the euro area has hastened the end of Dexia, without giving them time to continue their work of restructuring.

Pierre Mariani has promised that he would take "responsibility to the end", while taking care to separate the action of the fall of Dexia. The bankruptcy of the institution was caused by the "strategic errors of the previous management," he said.The latter had acquired all of the huge bond portfolio of Dexia, the source of his difficulties refinancing. She even continued to invest until the summer of 2008. Jean-Luc Dehaene has evoked the astonishment of Pierre Mariani when he arrived at Dexia, discovering that he took the lead, not a bank but "a hedge fund." Both men stressed the work done. Pierre Mariani does not regret having accelerated the process of asset sales earlier this year. He said that if states had to refinance the portfolio of Dexia at the time of the rescue of 2008, they would not have had to mobilize 90 billion euros, but 300 billion.

On-balance sheet Dexia has not withstood the pressure of the crisis in the euro area, pleads management.Pierre Mariani said that all banks had received government recommendations, requiring them to maintain their exposure to debt of peripheral European countries in order not to further destabilize the country. "The group may have been naive in following these recommendations," he conceded. In the short term, the surveillance of Moody's and "repeated rumors during the last week have increased the pressure on the financing of the group."

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Credit Agricole took over the Cac 40. The title wins more than 6% at the Paris Stock Exchange to 6.60 euros. Investors welcomed the results of the second quarter of the group, better than expected.

In July, Crédit Agricole said that the participation of the bank in terms of aid to Greece and the operations of its subsidiary Emporiki, the country would have an impact of up to 850 million euros on its performance in the second quarter. Finally, the load is lighter than expected: Greece does not cost "only" 640 million euros on quarterly Credit Agricole. A load that is distributed as follows: 202 million euros (146 million after tax) for impairment of securities of the Greek states and 494 million for the goodwill of the Emporiki Bank (2006).However, the debt problem gecque led the market value of Crédit Agricole in a dramatic decline: its stock has lost nearly 35% of its value since the beginning of the year.

These results confirm the long-term goals

As for results, the bank has indeed announced Thursday a net profit after minority interests fell by 10.6% to 339 milion euros in the second quarter versus the same period in 2010. But this is higher than expected by analysts who had forecast a quarterly profit of 193 million euros. BNP Paribas and Societe Generale were published at the beginning of the respective benefits of 2.12 billion euros and 747 million.

According to the CEO of Crédit Agricole Jean-Paul Chifflet, these results confirm a positive underlying trend at the operational level of the bank, in the 2014 strategic plan, presented last March. The group aims to achieve a return on equity of 10% to 12% by 2014. The bank would also surpass the 25 billion euros in net banking that date.

In the medium term, Crédit Agricole has no plans to increase the capital despite the market turmoil in July and August, denied the report, published Wednesday in the Letter of expansion of 1.5 billion euros, dedicated the recapitalization of its subsidiaries in Southern Europe. However, the group recognized that its goal of returning to profit for Emporiki Bank in 2012 would be compromised.

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The era of good times is over. China, which for years received lessons in economic policy by the United States, primarily relating to foreign exchange, takes revenge. While S & P has to sacrifice the triple A of the United States, Beijing, the largest holder of U.S. bonds in the world – by far, with 1,160 billion of U.S. Treasuries in the drawers according to figures from Washington published last May – now estimated to have "every right to require U.S. to address their structural problems of debt."

The Chinese government estimates that S & P has only confirmed a "horrible truth". One that was highlighted by the rating agency Dagong China, which has degraded the U.S. triple-A immediately after the agreement to raise the debt ceiling.She said "the days of Uncle Sam, crippled with debt, could easily squander endless amounts of borrowing from abroad seem numbered. (…) In order to treat his addiction to debt, the U.S. must restore the principle of common sense that we must live within its means. " For Dagong, the note of the United States increased from A + to A with, again, a negative outlook. According to the official Xinhua news agency, the adoption by Congress of a text to avoid a default of the United States failed to defuse "the bomb of debt." This failure to control U.S. borrowing could affect the "well-being of hundreds of millions of families in the United States and abroad," she lamented a few days ago.

In other countries, tempers

In France, Baroin, Minister of Economy, trying to reassure.First European official to respond to the thunder of the deterioration in the sovereign rating of the debt of the United States, he ensured that France "has full confidence in the strength of the U.S. economy and its fundamentals, and in the U.S. government's determination to implement the plan that was approved by Congress this week. "

In the UK, the British Trade Vince Cable held Saturday "completely predictable" degradation of the United States. "This is a completely predictable consequence of the mess created by Congress (…) but they (MPs) have now heard, and the situation of the United States is strong enough," he said.

Japan, the second creditor of the United States, said that its policy of buying U.S. bonds remained unchanged despite lowering their score."Our confidence in U.S. Treasuries and their attractiveness as an investment will not change because of this action," said a Japanese government official told Dow Jones Newswires. Japan, which is trying by all means to curb a flight of its currency against the greenback, has no interest in selling its dollar assets for now since it would only strengthen the yen.

In South Korea, senior officials of the Ministry of Finance held an emergency meeting Saturday to analyze the consequences of the downgrade. But the government has warned against overreaction. "We need not be too worried about our economy and financial markets," said Deputy Finance Minister Yim Jong-yong. An Australian Prime Minister Julia Gillard has also called for calm markets."At the same time, the other two major agencies, Moody's and Fitch continue to note the U.S. economy AAA. So I think people need to consider all the facts, "she said. In the Philippines, a spokesman for the Presidency said that the downgrade by S & P was "to some extent a wakeup call for the U.S. begin to seriously address their economic problems. We have confidence in their ability to do so. "

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The outlook for the parent company of Airbus are rather positive. EADS confirmed on Friday its forecast for the full year 2011, with sales up 8% to 21.9 billion euros and operating profit (EBIT) of 720 million euros in first half of this year. The net result of EADS amounted to 109 million euros (compared to 185 million euros in the first half of 2010), or earnings per share of 0.13 euro (0.23 euro a year ago) . In the second quarter, the manufacturer posted a net profit of 121 million euros and a turnover of 12.082 million – up from data over the same period the previous year (82 million euros in profit net 11.35 billion in revenue).

The activities of EADS, however, impacted by a decline of 41% of net profit in the first half, to 109 million euros related to accounting revaluations following the change in exchange rates, the statement said the group. But the net cash position of the manufacturer, specialized in aerospace and defense of a $ 11 billion still provides a solid foundation to meet the operational needs of the group and fuel future growth, "said EADS Friday .

An exceptional increase in orders

"Our first half results in 2011 reflect the strong demand in the commercial aviation sector," said the executive chairman of the Louis Welsh, comment out the publication of the results of EADS.At Le Bourget, Airbus, the main subsidiary of EADS has reached a new record this year, orders for 730 commercial aircraft, including 667 A 320 Neo, remotorisée version of medium-haul Airbus, less fond of fuel. EADS believes that Airbus should undertake the delivery of 520 to 530 commercial aircraft throughout the year, with a level of gross orders up to one thousand units. In the first half of 2011, new orders for Airbus amounted to 58.1 billion euros at the end of June the company has already earned 453.8 billion euros (at the end of 2010, total orders was 448.5 billion).

For all of 2011, EADS expects a stable EBIT before non-recurring items in 2011 compared to 2010, about 1.3 billion euros. Louis Welsh stated in particular that Airbus confirms its target of delivering about 25 to 380 in 2011.Moreover, based on the basis of an exchange rate of one euro worth 1.35 dollars, the European manufacturer hopes to earnings per share higher than in 2010, which was 0.68 euro. He also put on a significant improvement in its EBIT by 2012 due to higher sales volumes and improved performance of the Airbus A 380.

The title of EADS was in line with the trend of the CAC 40 stock market this morning, down -0.76% to 24.15 euros.

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While the ongoing wrangle with Casino in Brazil has shifted in favor of its competitor, Carrefour has released Wednesday a turnover in line with expectations. Group sales in the first half amounted to 44.6 billion euros, up 2.7% at current exchange rates (+ 2.5% at constant exchange rates) and 0.1% in comparable excluding petrol, adjusted for the calendar effect. Sales for the second quarter amounted to 22.4 billion euros, up 1.6% at current exchange rates, but down 0.2% on a comparable basis, excluding petrol and excluding the calendar effect .

While the group had mid-June, revised down its operating income to 35% in France, it now expects a decline of 23%, due "mainly to France."Lars Olofsson said that "Carrefour has set up an action plan in order to achieve the target set by the Group to grow its sales and EBIT in 2011."

Uneven performance in France

In France, the performance is mixed. Lars Olofsson deplores a "unsatisfactory performance of hypermarkets," whose sales are down 3.3% excluding petrol in the second quarter and adjusted for the calendar effect, after falling 1% in the first quarter.

However, Carrefour welcomes the performance of its stores. Carrefour Market and saw its sales grow by 1.3%. As for Carrefour Planet, "the four stores models continue to show sales growth in double digits."The group said that "the deployment of 21 new stores in the second quarter Planet is broadly in line with the plan, these new stores outperform those of our traditional hypermarkets in Spain and Belgium in particular."

Abroad, the decline continues in Western Europe (down 2.1% in the second quarter and 2.6% in the first). The activity in Belgium, however, displays a successful turnaround, with sales growth of 10.1% in hypermarkets.

Emerging markets are, in turn, still the group's activity. Latin America was up 11% at constant exchange rates, excluding petrol and adjusted for the calendar effect. In Brazil, where Carrefour battle as to marry the first retailer in the country, sales rose 10.2%.In Asia, growth remained at 5.3%, with an increase of 8.3% in China.

In exchange, Carrefour began declining after the announcement of these results. After losing 3% on opening, the title was eventually closed up 1.52% to 22.325 euros in the last trade. The CAC finished up 0.51%

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