The FX Report

The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, expressed his “deep satisfaction” at the announcement of the Eurogroup to support bank recapitalization in Spain, that “crucial” to succeed.

“I would like to express my deep satisfaction at the announcement by members of the Eurogroup, which complements the measures taken by the Spanish authorities in recent weeks to strengthen the country’s banking system,” Lagarde said in a statement the IMF.

The managing director today participated in the videoconference of the Eurogroup in which Spain agreed to grant a loan of up to 100,000 million euros to clean up the Spanish financial sector.

“This amount is consistent with the capital needs that were identified in the Programme of Financial Sector Assessment Program (FSAP) of the IMF and gives assurances that the Spanish banking system will have the funding needed,” said Lagarde.

The director of the international organization said that “creating a credible support mechanism to recapitalize the most vulnerable segments of the banking system was one of the main recommendations of the IMF FSAP recently evaluated to Spain.”

The Fund yesterday released its initial assessment of the needs of the financial sector in Spain, where weak institutions need to increase their capital reserves “at around 40,000 million euros,” but said it could be more.

Finally, Lagarde said the IMF “is prepared to respond to the invitation of the Eurogroup members to support the implementation and monitoring of this financial support through periodic reports.”

The Minister of Economy of Spain, Luis de Guindos, explained that the role of the International Monetary Fund (IMF) in the European rescue of the Spanish banks will be “strictly advisory” and not provide funding.

The Economy Secretary of UI, Jose Antonio Garcia Rubio, has said that the European plan to help Spanish banking is a “tremendous failure” of the policies of the PSOE and PP, and has warned that the “rescue” has many ” dark spots “that should explain to Congress the prime minister, Mariano Rajoy.

Garcia Rubio said that although the economy minister, Luis de Guindos “seen with tissue paper” the agreement reached today by the Eurogroup “this is a bailout in the entire banking sector, which has been imposed to Spain from the European Commission and the International Monetary Fund (IMF). ”

In this regard, stressed that “anyone who can read” will have noticed that the U.S. president, Barack Obama, ventured yesterday what happened to Spain today.

IU leader argues that what happened is a “failure” because when the PSOE ruled that Spain had said the bank “stronger” of the EU, and the PP because until recently categorically denied the possibility of a “rescue” Spain.

Garcia Rubio makes emphasis on the fact that although the Minister of De Guindos try to show that there is a separation between financial debt and Spanish sovereign debt “the facts say otherwise” because EU aid accounted for as debt, will be paid as such and interest will go to the deficit.

He also noted that it is “insulting” that so important a volume dedicated funds to the bank “when we are cutting back on health, education, dependency, and the salaries of public employees.”

In short, Jose Antonio Garcia Rubio has seen many “dark spots” in the explanations that the economy minister has given the bank bailout, such as what the “conditions” that are going to get banks to receive money.

Nor is it clear that the FROB the intermediary for the distribution of loans, because the fund had already given money before and there has been no more credit for families or businesses.

In sum, the federal secretary of Economy UI considers a case of this magnitude to be explained by the head of the executive and has therefore announced that it will propose the parliamentary group of UI that requires his presence at the full Congress.

In addition, Jose Antonio Garcia Rubio has criticized the Minister of Guindos been used as an “excuse” the absence of public explanations that Rajoy is not part of the Eurogroup.

On the other hand, the general coordinator of IU, Cayo Lara, has reviewed the “bank bailout” through his Twitter account.

“Banks borrowed beyond our means. We rescued and is now cut to follow cutting. It’s a scam,” said in a tweet after learning of the agreement.

The Economy Minister Luis de Guindos, justified today who has not appeared the chief executive, Mariano Rajoy, to explain the European aid to Spanish banks, as has emphasized, the decision was taken at a meeting of the Eurogroup and it is he who is part of that forum.

“For a very simple question, I am the member of the Eurogroup and the Prime Minister,” he responded when a reporter asked why Rajoy did not appear in the press conference in which he informed the Spanish request for help for the financial system.

Has not clarified whether the Prime Minister will travel tomorrow as planned to Gdansk (Poland) to witness the first game of the Spanish team at Euro, but government sources have pointed that keeps your calendar.

De Guindos stressed that Rajoy has been “quite concerned” and has had a “vital role” in the process that has led to the loan at Spanish banks, thanks to his contacts with European leaders and the coordination of all Executive’s economic team.

“Without the help of Prime Minister, I believe that today would not have reached any agreement as we have on the table,” he added.

The Government refuses to quantify the capital needs of Spanish banks and points that have been commissioned to external audit reports on the health sector, but EU sources have advanced the Eurogroup CSF studies with a limit of up to 100,000 million euros.

The Economy Minister Luis de Guindos, participates in a conference call with emergency managers of Economy and Finance of the euro area to study the possible ways to recapitalize troubled institutions.

So far the Government has the report of the International Monetary Fund (IMF) has estimated that the troubled institutions needed at least 40,000 million euros.

Once started the conference of the Eurogroup, government sources have insisted that they want to hear from members of the euro area and should be expected also to know the estimates of independent contractors be checking.

The Eurogroup meeting has been convened by its president, Jean Claude Juncker, who, told German public broadcaster Deutschlandradio Kultur, has held that “the solution must occur quickly,” and stressed that this is a purely banking.

The governor of the Bank of Italy, Ignazio Visco, said today that the outlook for the global and European economy and the conditions under which are the financial markets are “disappointing” and that his country “economic emergency” is not over yet .

Speaking at a ceremony in the Italian city of Venice (northeast) of the Council for Relations between the U.S. and Italy, Visco warned of the danger that, at this juncture, there will be a “major downturn” in the global economy can bring greater risks to the financial system.

“The outlook for the European and global economy are daunting, as are the conditions of financial markets,” he said, in remarks that reflected the Italian media, Visco, who took over in October to Mario Draghi at the Bank of Italy, following the appointment as president of the European Central Bank (ECB).

“In Greece, which is politically deadlocked, and the serious difficulties in the Spanish banking sector, tensions have returned and the risk premiums of sovereign debt have increased (…) A new global slowdown would add more risk to an already fragile financial system, threatening the solvency of sovereign debt in Europe and elsewhere, “he added.

The governor of the Bank of Italy opted for that in Europe are undertaken “bold reforms” aimed at the financial and fiscal union and said that “in the absence of a European political union, the vulnerability of various countries be overstated” and that, without adequate community governance arrangements, “the monetary union is difficult to sustain.”

“In Europe the reform process needs to be strengthened at national and supranational to faster growth and promote the right balance in the public sector and private,” said Visco.

“The G20 commitment must be to continue on growing consistently. In particular, the reform of economic governance must speed to break the link between sovereign risk and bank risk,” he added.

The head of the Bank of Italy was in favor of Europe to continue with the removal of obstacles to the economy, saying it remains “essential” to carry out monetary policies “both conventional and unconventional.”

“This week, the ECB confirmed its determination to provide all the necessary liquidity to the banking system and to preserve the operation of the transmission mechanism of monetary policy. But it is crucial to note that non-standard measures in the Eurosystem are temporary and are a bridge that is going through yet, “impacted.

The Association of Minority Bankia, which will form part of the Spanish Association of Minority Shareholders of Listed Companies (AEMEC), has become today bringing together more than 100 shareholders of the entity requesting compensation for the alleged irregularities in the IPO .

The first objective is therefore to recover the investment of the minority or the damages caused by the alleged irregularities in the issuance of stock Bankia as AEMEC said today in a statement.

For this reason, the association plans to focus on civil actions based on the information contained in the prospectus listing.

To this end, the firm Cremades & Calvo-Sotelo, who will be responsible for the representation and advocacy, is studying the possibility of accumulating the shares of individual shareholders in a single lawsuit.

“Our main objective is to recover the money lost by shareholders rely on the information provided in the prospectus,” said the president’s office, Javier Cremades, who explained that they are preparing legal action through the civil courts.

The first prosecution of shareholders shall apply for preliminary inquiries to obtain judicial documents and information necessary to confirm whether there are irregularities in the process of Bankia IPO.

The group has also hired an inspector of the Bank of Spain on leave and a doctorate in economics, that as a result of information obtained through the proceedings, to prepare an expert report to substantiate the claims of shareholders, who have lost more than 70% of its value since the IPO.

Greece is still mired in uncertainty and now faces a key legislative Sunday 17, converted into a referendum on his tenure in the euro, despite the two aid programs of the European Union (EU) and the International Monetary Fund (IMF) value of 240,000 million euros.

According to official data, the Greek economy will shrink this year for the fifth consecutive year at 4.75%, and from 2008 to 2011 its GDP accumulated a fall of 13.8%.

The adjustments and austerity promoted by international creditors has caused unemployment has more than doubled to the current high of 22%.

Have also been closed about a third of business and the falling purchasing power of most of the Greeks has been reduced by almost half, while more than a quarter of the population lives below the poverty line.

Higher taxes and fees linked to the reduction of pensions has focused on a particularly difficult for older people with more modest pensions, according to reports from many NGOs.

The public deficit closed in 2011 at 9.1%, well behind the plans, because of the effect of economic contraction in tax revenues.

At the same time, the risk premium is above the 2,700 points, a level of funding that keeps Greece can be financed and makes it completely dependent on the EU and the IMF for not suspending payments.

The so-called debt crisis began soon after the victory of George Papandreou Social in October 2009, after announcing that the deficit left by the previous conservative government of New Democracy was 6%, but 12.7% of GDP.

Subsequent revisions of the EU finally placed it at 15.4%.

In 2008 Greece ended a growth cycle of 15 years, coupled with the distrust generated by the data hidden deficit and drastic cuts rating agency risk measurement markets closed to the public debt helena.

In May 2010, the EU and the IMF approved a loan amounting to 110,000 million euros, which has been delivered in installments, in return for a draconian plan savings in public spending and other structural adjustments.

A year later, another program was approved aid worth 130,000 million euros, which included removing half of government debt in private hands, about 100,000 million.

The unpopularity of the savings measures stoked protests in the street and wore both Papandreou last November that left the government, which was remodeled to give input also conservatives and ultranationalists led for five months, until early May, and Lukas Papadimos former Prime Minister.