Buy My IOU – Sell Your Government IOU For CASH

All eyes are on the eurozone debt summit in Brussels

Global stock markets have risen on reports that eurozone leaders have reached a provisional agreement on measures to tackle the eurozone debt crisis.

The draft includes the possibility of a Greek bond swap and a debt restructuring, reports suggest. A bank tax has not been included, they say.

The Milan stock exchange rose by 4% while the Spanish market gained 3%. US shares also opened sharply higher.

European banking shares led the way.

In Germany, Commerzbank climbed almost 9% and Deutsche Bank rose 3.6%, while in France Societe Generale and Credit Agricole gained about 6%.

And in the UK, Barclays rose almost 10%, while Lloyds Banking Group and Royal Bank of Scotland were up more than 7%.

Angela Merkel wants private investors to share taxpayers’ burden if Greece restructures its debts

German Chancellor Angela Merkel and French President Nicolas Sarkozy have hammered out a common position on the euro debt crisis.

A statement by the French president’s office said agreement had been reached after seven hours of talks in Berlin.

It comes ahead of a crunch meeting of eurozone leaders to resolve the Greek debt crisis and prevent further contagion to other eurozone economies.

Details of the deal have not yet been released.

Jean-Claude Trichet, the European Central Bank president, was also brought into the discussions, according to a spokesman for Mrs Merkel.

Germany had previously insisted that Greece’s lenders should be forced to take losses as part of any further rescue deal for Athens.

But this had been opposed by France and the ECB, who fear it could spark a Europe-wide banking crisis, push Spain and possibly Italy into trouble, and even jeopardise the solvency of the ECB itself.

‘Very serious’

Policymakers are set to discuss a range of measures at the meeting later on Thursday, including a new loan package to Greece and the role of private investors in any debt restructuring.

Reports suggest a new tax on banks will also be debated.

But German Chancellor Angela Merkel has cautioned against over optimism.

Greece received its first aid package in May last year, but the debt crisis continues to undermine confidence in global financial markets, with some commentators suggesting it threatens the future of the euro itself.

Politicians and investors are calling for decisive action to help bring the crisis to an end.

“Nobody should be under any illusion; the situation is very serious,” European Commission President Jose Manuel Barroso said on Wednesday.

“It requires a response. Otherwise, the negative consequences will be felt in all corners of Europe and beyond.”

The Governor of the Bank of England, Sir Mervyn King, has said that the crisis in the eurozone posed the most serious and immediate risk to the UK’s financial system.

President Barack Obama has also weighed in, calling Mrs Merkel on Tuesday night to stress the importance of tackling the debt crisis in sustaining the global economic recovery.

The International Monetary Fund has also called on European leaders to take swift and decisive action.

Delaying such action further would be “very costly” for the world economy, it said.

Spending cuts

However, there are divisions among policymakers about the best way to resolve the crisis.

There appears to be consensus on the need for a new loan agreement, analysts say, thought to be similar in size to the 110bn euro ($ 156bn; £97bn) package agreed last year.

However, there is also a growing consensus that this will merely act a sticking plaster, and that the fundamental problem of Greece’s indebtedness needs to be addressed.

Athens has already implemented a raft of wide ranging austerity measures, including spending cuts and tax rises, and earlier this month agreed to further drastic action to cut its debt.

Bank tax

But there is a growing sense that these will not be enough. The only way to resolve the problem is to restructure Greece’s debts, many observers argue.

Germany has proposed allowing Athens more time to repay, effectively rolling over existing debts into new bonds.

It wants private investors, largely banks, to participate in this restructuring.

But the European Central Bank has strongly opposed this plan, arguing that such a rollover would constitute a default in the eyes of the international credit ratings agencies and, as such, would undermine investor confidence and the euro itself.

An alternative way get private investors to contribute to any aid package would be to introduce a new bank tax.

Reports suggest leaders will discuss precisely such a tax, even though this would prove hugely unpopular with the banks.

It is these divisions that explain Mrs Merkel’s attempts to dampen expectations ahead of the summit.

The summit will take place in Brussels at 1300 local time (1100 GMT).

Angela Merkel wants private investors to share taxpayers’ burden if Greece restructures its debts

Eurozone leaders will meet on Thursday for a crunch summit to try to resolve the Greek debt crisis and prevent any further contagion to other so-called peripheral economies.

Policymakers will discuss a range of measures, including a new loan package to Greece and the role of private investors in any debt restructuring.

Reports suggest a new tax on banks will also be debated.

But German Chancellor Angela Merkel has cautioned against over optimism.

‘Very serious’

Greece received its first aid package in May last year, but the debt crisis continues to undermine confidence in global financial markets, with some commentators suggesting it threatens the future of the euro itself.

Politicians and investors are calling for decisive action to help bring the crisis to an end.

“Nobody should be under any illusion; the situation is very serious,” European Commission President Jose Manuel Barroso said on Wednesday.

“It requires a response. Otherwise, the negative consequences will be felt in all corners of Europe and beyond.”

The Governor of the Bank of England, Sir Mervyn King, has said that the crisis in the eurozone posed the most serious and immediate risk to the UK’s financial system.

President Barack Obama has also weighed in, calling Mrs Merkel on Tuesday night to stress the importance of tackling the debt crisis in sustaining the global economic recovery.

The International Monetary Fund has also called on European leaders to take swift and decisive action.

Delaying such action further would be “very costly” for the world economy, it said.

Spending cuts

However, there are divisions among policymakers about the best way to resolve the crisis.

There appears to be consensus on the need for a new loan agreement, analysts say, thought to be similar in size to the 110bn euro ($ 156bn; £97bn) package agreed last year.

However, there is also a growing consensus that this will merely act a sticking plaster, and that the fundamental problem of Greece’s indebtedness needs to be addressed.

Athens has already implemented a raft of wide ranging austerity measures, including spending cuts and tax rises, and earlier this month agreed to further drastic action to cut its debt.

Bank tax

But there is a growing sense that these will not be enough. The only way to resolve the problem is to restructure Greece’s debts, many observers argue.

Germany has proposed allowing Athens more time to repay, effectively rolling over existing debts into new bonds.

It wants private investors, largely banks, to participate in this restructuring.

But the European Central Bank has strongly opposed this plan, arguing that such a rollover would constitute a default in the eyes of the international credit ratings agencies and, as such, would undermine investor confidence and the euro itself.

An alternative way get private investors to contribute to any aid package would be to introduce a new bank tax.

Reports suggest leaders will discuss precisely such a tax, even though this would prove hugely unpopular with the banks.

It is these divisions that explain Mrs Merkel’s attempts to dampen expectations ahead of the summit.

The summit will take place in Brussels at 1300 local time.

French President Nicolas Sarkozy is meeting German Chancellor Angela Merkel

French Finance Minister Francois Baroin has stressed the need for Europe to send a “strong message” that it will act decisively to contain the Greek debt crisis.

He said Thursday’s summit of European leaders should pave the way for further assistance to the debt-ridden country.

The International Monetary Fund has called on Europe to take strong action.

Mr Baroin’s comments came as European banking shares recovered strongly from sharp falls earlier this week.

In France, Societe Generale and BNP were up about 3%, while in Germany, Deutsche Bank climbed 2.8% and Commerzbank rose more than 2%.

Banking shares fell sharply on Monday on debt fears and concerns about the credibility of last Friday’s Europe-wide bank stress tests.

Debt rollover

All eyes are now on Thursday’s summit, with French President Nicolas Sarkozy travelling to Berlin to discuss the debt crisis with German Chancellor Angela Merkel ahead of the meeting.

“This meeting at the highest decision-making level should allow us to take a further essential step to establish the conditions of a new package for Greece, that will make Greece’s debt more bearable,” Mr Baroin said.

“A strong message should be made tomorrow.”

However, divisions remain among European leaders, and Mrs Merkel has played down the chances of Thursday’s emergency eurozone summit resolving Greece’s debt crisis.

Mrs Merkel wants private investors to contribute to any aid package by agreeing to roll over loans they have made to Greece.

However, the European Central Bank disagrees, arguing that such a rollover would constitute a default in the eyes of the international credit ratings agencies and, as such, would undermine investor confidence and the euro itself.

Continue reading the main story

Shares in News Corporation recovered ground after Rupert and James Murdoch’s appearance in front of a committee of British MPs.

At the close of trading in New York, News Corp shares were 6% higher.

The move recovers some of the losses sustained as the phone-hacking scandal at its newspaper title, the News of the World, has unfolded.

But pressure on the company continues, with another major shareholder questioning the company’s standards.

The giant Californian public pension fund, CalPERS, has joined the list of those who are unhappy with the way the company has been managed.

CalPERS (California Public Employees’ Retirement System), which owns 6.4 million of News Corp’s shares, is in particular unhappy with the shareholding structure that gives the Murdoch family’s ‘B’ shares voting rights, meaning that although they own 12% of the company, they hold the biggest single block – 40% – of the votes.

Other ‘B’ shares are largely held by unnamed investors.

Family power

More than two thirds of the shares are ‘A’ shares, which give investors no say as to who sits on the board, let alone major strategic decisions such as whether to bid for another company.

Its Senior Portfolio Manager, Anne Simpson, who heads its corporate governance program, said: “News Corp does not have one share one vote. This is a corruption of the governance system.

“Power should reflect capital at risk. CalPERS sees the voting structure in a company as critical. The situation is very serious and we’re considering our options. We don’t intend to be spectators – we’re owners.”

Other financially interested parties have this week reviewed their opinion of the strength of the company.

On Monday, the ratings agency Standard & Poor’s placed News Corp’s credit rating on a negative watch citing “increased business and reputation risks”.

Also on Monday, another of its shareholders urged it to raise its standards.

The Nathan Cummings Foundation in New York, a small shareholder in News Corp, wrote to the board asking it to improve its transparency and governance:

The Foundation is concerned about News Corp’s political lobbying, particularly payments to organisations that have then campaigned for looser regulation which could potentially benefit its businesses.

News Corp has reorganised its standards committee, set up to investigate impropriety at News International.

News Corporation is the parent company of News International, which runs the Sun, the Times and Sunday Times. Their sister paper, the News of the World, was shut down earlier this month as a result of the phone-hacking scandal.

Gold prices have been rising because of continued concerns over Europe’s debt crisis

The price of gold jumped above $ 1,600 (£1,000) an ounce for the first time as debt worries in the US and Europe continued to trouble investors.

The precious metal rose to $ 1,604 an ounce in London trading Monday, before ending the day at $ 1,602.

The metal has been rising in value while the US dollar and euro currencies have been declining.

Gold is considered a safe investment and usually gains at times of global economic uncertainty.

“Gold hit another milestone… at $ 1,600 as investors lose confidence in the ability of politicians to get a grip with the debt problems weighing down on sentiment,” said Michael Hewson from CMC Markets, a trading group.

“More advances look likely,” he said.

The record breaking price comes ahead of Thursday’s summit of eurozone leaders in Brussels where they will once again try to contain the growing debt crisis.

Investors are concerned that Greece may default on its debt, and countries such as Italy and Spain, who are also struggling with high debt levels, will get pulled into the crisis.

Meanwhile in the US politicians are struggling to reach an agreement on a deficit reduction plan in time to avoid a debt default before the deadline of 2 August.

News Corp is one of Australia’s best-known companies and most widely held shares

Shares of News Corporation, the company owned by Australian billionaire Rupert Murdoch, have dropped almost 6% to a two-year low.

The slide comes as an investigation into phone hacking in the UK has widened and a key figure was arrested.

News Corp owns the two newspapers at the heart of the scandal, The Sun and the now closed News of the World.

In morning trading in Sydney, the shares were down 5.5% at 13.91 Australian dollars (£9.20).

Its shares have lost almost a fifth of their value since the start of July.

Widening probe

News Corp is the parent company of News International, which runs The Sun, the News of the World, The Times and Sunday Times.

On Sunday, ex-News International chief executive Rebekah Brooks was arrested by police in the UK on suspicion of conspiring to intercept communications and on suspicion of corruption.

Mrs Brooks has denied wrongdoing and was released on bail at midnight (2300 GMT).

In another twist, Metropolitan Police Commissioner Sir Paul Stephenson stepped down for his part in the phone hacking scandal.

Sir Paul, Britain’s most senior police officer, was criticised for hiring former News of the World executive Neil Wallis – who was questioned by police as part of the probe into hacking – as an adviser.

The stress test on banks has failed to calm nerves over Europe’s debt crisis

Stock markets fell on Monday as a healthcheck on banks failed to stem worries about Europe’s debt crisis.

Financial shares were heavy fallers, with Royal Bank of Scotland down 3.8% and BNP Paribas 3.1% lower.

In early trading the FTSE 100 index fell 0.9%, France’s Cac 40 shed 1.4%, and Germany’s Dax was 1.3% down.

On Friday, five European banks failed a stress test on their finances, while another 16 were said to be near the danger zone.

Meanwhile, the price of gold topped $ 1,600 an ounce for the first time as investors put money into the haven commodity.

Concerns among investors have also been fuelled by the Obama administration’s failure to agree a debt-ceiling deal.

The US risks defaulting on its debts unless Congress can agree new rules that will allow Washington to borrow more money.