• Greek deposits have stemmed, reforms have stalled and conditions are ‘very difficult’
• Immediate interventions required by the state
• Words aren’t enough to restore liquidity

Bloomberg headlines

Kind of reaffirms the outlook isuued by KEPE earlier today in ekathimerini that Q3 recession is likely to exceed 9%

Official’s comments in Die Zeit

Reuters reporting.

Oh-eh, that sent a shiver down my spine

EUR/USD continues to march up and down on the spot, presently at 1.2495.

BERLIN (MNI) – The German government cabinet on Wednesday approved
the budget bill for 2013 and the medium-term fiscal outlook through
2016.

The budget draft foresees federal net new borrowing next year
falling to E18.8 billion from E32.1 billion projected this year.

Federal expenditures in 2013 are tabled at E302.2 billion, down
from the E312.7 billion earmarked for the current year. Federal tax
revenue is projected at E259.8 billion next year, up from E252.2 billion
expected this year.

Other revenue is seen at E23.6 billion in 2013, down from the E28.4
billion expected for 2012. This includes, for example, proceeds from
highway tolls, distributed dividends and the Bundesbank profit. For next
year’s budget, the Finance Ministry has tabled a cautious estimate of
the Bundesbank profit at E1.5 billion and for 2014 at E2.0 billion.

The budget bill still must pass both houses of parliament.
Traditionally, parliament lowers federal net new borrowing somewhat
further.

In its medium-term fiscal plan, the government envisions 2014
federal net new borrowing of E13.1 billion and E4.7 billion for 2015.
For 2016, the government expects zero federal net new borrowing, given
that it projects a slight federal budget surplus of E1.0 billion.

Federal expenditures are projected at E302.9 billion in 2014,
E303.3 billion in 2015 and E309.9 billion in 2016. The expenditures in
2016 include the surplus of E1.0 billion for paying down debt in the
government’s investment and amortization fund, which was set up to
counter the severe economic crisis in 2009.

Federal tax revenue is projected at E269.1 billion in 2014, E277.3
billion in 2015 and E288.5 billion in 2016. Other revenue is seen at
E20.7 billion in 2014, E21.3 billion in 2015 and E21.4 billion in 2016.

The federal structural budget deficit is expected by the government
to fall from 0.86% of GDP this year to 0.35% next year, which means that
it would meet the deficit goal under the country’s debt limitation bill
in 2013 — three years ahead of schedule.

The government projects the structural deficit to fall further to
0.21% in 2014 and to 0.10% in 2015. For 2016, it tables a slight surplus
of 0.04%.

–Berlin bureau: +49-30-22 62 05 80; twidder@marketnews.com

[TOPICS: MT$$$$,M$X$$$,M$G$$$,MFGBU$,MGX$$$,MFX$$$]

LONDON (MNI) – Mortgage approvals slumped to their lowest level
since April 2011 in May, according to the latest British Bankers’
Association data.

Net mortgage lending turned negative for the first time in the
recorded BBA data, dropping by stg73million. This is the first time the
amount of net mortgage lending has actually fallen since the BBA started
publishing these data.

These data underline the challenge the government and the Bank of
England face in trying to revive bank lending with their various
schemes, such as the Funding for Lending plan and the National Loan
Guarantee Schemes.

The number of remortgaging approvals also fell, dropping to 18,678
from 20,657 in April.

Commenting on the data, BBA statistics director, David Dooks said
the weak lending picture owed more to the preference of households to
pay down mortgage debt:

“The high street banks’ total lending to households stands at
stg850 billion. They provide around two-thirds of all new mortgage
finance but because at the same time, mortgage-holders are reducing
their borrowing by repaying capital, the outstanding level of debt is
changing little.”

–London Bureau; Tel: +44207862 7491; email: wwilkes@marketnews.com

[TOPICS: MABDS$,M$B$$$]

Down from 32,103 in April and lowest since April 2011.

Net mortgage lending -£73 mln in May versus +£516 mln in April, the lowest on record 

I find covering this crisis increasingly depressing

The consequences are very sad. I was watching a programme the other night about Greece and the cuts to healthcare and how cancer patients aren’t getting their necessary medication. Heart rending…… 

up from 86.6 in May and above estimates of 85.4

June Composite business confidence stable at 75.4

ROME (MNI) – Forty-two workers at Istat, Italy’s national
statistics office, stormed the press office Wednesday morning,
temporarily halting the distribution of data on Italian business
confidence.

Francesca Taratamella, who works in the national accounting
department, said the action was intended to protest Istat’s failure to
award promotions to those who were entitled to them. She said she and
her colleagues had been given extra work and responsibilities without
any promotion or increase in wages.

“More in general, we are here to lament the freeze on new hires, on
salary increases and on promotions…in the public sector,” she said.

The complaint of Taratamella and the other Istat employees comes at
a time when the government of Italy’s Prime Minister Mario Monti is
implementing increasingly painful austerity measures.

Monti today faces a vote in parliament on his recently announced
labour reform law.

[TOPICS: M$I$$$,M$X$$$,MGX$$$,MT$$$$,M$$CR$]

Hesse CPI

June: flat m/m, +1.8% y/y
May: -0.2% m/m, +1.9% y/y
—
Pan-German CPI

MNI median forecast: flat m/m, +1.8% y/y
MNI forecast range: -0.2% to +0.1% m/m

May: -0.2% m/m, +1.9% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of Hesse
were overall unchanged in June, dampening the annual inflation rate to
+1.8% from +1.9% in May, the state statistics office said Wednesday.

The monthly result is in line with the median forecast for
pan-German CPI in an MNI survey of analysts.

Downward pressure on monthly inflation came from cheaper heating
oil (-4.0%) and motor fuel (-3.1%).

Energy prices continued to underpin the annual rate, partly
offsetting cheaper housing rents and utility bills.

Excluding energy, the core rate came to +0.2% on the month and
+1.6% on the year. Without the effects of housing rents or utility
charges, core CPI fell 0.1% on the month to stand 1.9% higher on the
year.

Some analysts expect inflation in Germany to pick up over the
medium term due to solid domestic demand, low unemployment, elevated
wage hikes and the accommodative monetary policy of the ECB.

The Bundesbank recently signaled that domestic inflation could
exceed the Eurozone average for some time given the growth divergences
among countries.

The central bank last week confirmed its inflation forecasts of
2.1% for 2012 and 1.6% for 2011. It warned of upward risks stemming from
higher than expected oil prices, a further decline of the euro and
possible moderate second-round effects following wage agreements in the
first half of 2012.

The Finance Ministry said last week that the moderate increase of
labor unit costs and stronger wage hikes this year “are currently no
inflation risk.”

ECB President Mario Draghi said earlier this month that “inflation
expectations remain well anchored and there’s no inflation risk in any
euro area country.”

Producer price inflation in Germany continued to slow in May,
falling to its lowest level in almost two years and adding to evidence
that pipeline pressures are easing.

For detailed information see data table on MNI MainWire.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

Brandenburg CPI

June: -0.1% m/m, +1.8% y/y
May: -0.2% m/m, +2.0% y/y
—
Pan-German CPI

MNI median forecast: flat m/m, +1.8% y/y
MNI forecast range: -0.2% to +0.1% m/m

May: -0.2% m/m, +1.9% y/y
—

BERLIN (MNI) – Consumer prices in the eastern German state of
Brandenburg fell -0.1% in June, dampening the annual inflation rate to
+1.8% from +2.0% in May, the state statistics office said Wednesday.

The monthly result is below the median forecast of a flat reading
for pan-German CPI in an MNI survey of analysts.

Downward pressure on monthly inflation came from cheaper heating
oil (-4.4%) and motor fuel (-3.4%), which offset costlier seasonal
foodstuffs (+4.8%).

Conversely, energy product prices had no impact on the annual CPI
rate. Nor did seasonal foods.

Excluding heating oil and motor fuel, core inflation came to +0.2%
on the month and 1.8% on the year. Factoring out seasonal food prices,
core CPI fell 0.2% on the month to give an annual rise of 1.8%.

Some analysts expect inflation in Germany to pick up over the
medium term due to solid domestic demand, low unemployment, elevated
wage hikes and the accommodative monetary policy of the ECB.

The Bundesbank recently signaled that domestic inflation could
exceed the Eurozone average for some time given the growth divergences
among countries.

The central bank last week confirmed its inflation forecasts of
2.1% for 2012 and 1.6% for 2011. It warned of upward risks stemming from
higher than expected oil prices, a further decline of the euro and
possible moderate second-round effects following wage agreements in the
first half of 2012.

The Finance Ministry said last week that the moderate increase of
labor unit costs and stronger wage hikes this year “are currently no
inflation risk.”

ECB President Mario Draghi said earlier this month that “inflation
expectations remain well anchored and there’s no inflation risk in any
euro area country.”

Producer price inflation in Germany continued to slow in May,
falling to its lowest level in almost two years and adding to evidence
that pipeline pressures are easing.

For detailed information see data table on MNI MainWire.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

The Irish environment minister says he hopes this weeks summit will see “further advances towards the realization from the EU member states that Ireland just cannot continue to cope with serious banking debt on top of sovereign debt.”

BERLIN (MNI) – German Chancellor Angela Merkel did not
categorically rule out a joint issuance of eurobonds at her appearance
in the parliamentary group of her junior coalition partner FDP on
Tuesday, a senior FDP lawmaker said Wednesday.

Rather, Merkel had stressed that there won’t be any eurobonds as
long as control over national budgets has not also been moved to the
European level, Otto Fricke, the parliamentary budget speaker of the
FDP, said Wednesday ahead of a meeting of the budget committee on
Europe’s permanent bailout fund ESM.

Asked by reporters if Merkel really told FDP parliamentarians on
Tuesday that there won’t be any joint liabilities as long as she lives,
Fricke replied: “Well, she did not say it like this.”

Rather, “she clearly said [common debt] under the principle we are
liable for others but others decide if they want to make more debt or if
they want to repay their debt — that won’t work.”

Fricke said the Free Democrats supported Merkel’s stance. It is not
possible to collectivize debt in Europe while leaving all budget
sovereignty in national hands, he said.

Norbert Barthle, the parliamentary budget speaker of Merkel’s
CDU/CSU parliamentary group, on Wednesday also said more control over
national budgets had to be moved to Brussels first. “Then one can also
ponder if there should be eurobonds,” he told reporters ahead of the
budget committee meeting.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$,MT$$$$,MFXBO$,MFGBU$]

Pushed up to  a day’s high of 79.68 recently but there’s a stack of offers  from exporters and the like up to 80.00, with some possible, but unconfirmed, buy stops through 80.10.  Above here there are more exporter offers from 80.35 ahead of the 100 day MA at 80.53.

On the flipside there’s talk still of semi-official bids from 79.30 down to 79.00

Can’t see it getting too carried away either way to be honest……

USD’s sitting at 79.64

• Spain cannot fund itself at current yields for a long time
• Calls for direct bank recaps from EU rescue funds
• EU should work faster
• July eurogroup to decide on Spain deficit goal
• To fight so EU rescue loans don’t have seniority

Would be good if they finally got with the programme 

Saxony CPI

June: -0.1% m/m, +1.7% y/y
May: -0.2% m/m, +1.9% y/y
—
Pan-German CPI

MNI median forecast: flat m/m, +1.8% y/y
MNI forecast range: -0.2% to +0.1% m/m

May: -0.2% m/m, +1.9% y/y
—

BERLIN (MNI) – Consumer prices in the eastern German state of
Saxony fell 0.1% in June, dampening the annual inflation rate to +1.7%
from +1.9% in May, the state statistics office said Wednesday.

The monthly result is below with the median forecast of a flat
reading for pan-German CPI in an MNI survey of analysts.

Downward pressure on monthly inflation came from cheaper heating
oil (-4.9%) and motor fuel (-3.1%).

Annual price developments were driven by energy products, notably
household energy. Seasonal foodstuffs also had an upward effect.
Conversely, apartment rental prices – including utilities – weighed on
the yearly rate.

Core inflation excluding household energy and motor fuel came to
+0.1% on the month and +1.6% on the year. Excluding energy and seasonal
foods, the core rate came to -0.1% on the month and +1.4% on the year.

Some analysts expect inflation in Germany to pick up over the
medium term due to solid domestic demand, low unemployment, elevated
wage hikes and the accommodative monetary policy of the ECB.

The Bundesbank recently signaled that domestic inflation could
exceed the Eurozone average for some time given the growth divergences
among countries.

The central bank last week confirmed its inflation forecasts of
2.1% for 2012 and 1.6% for 2011. It warned of upward risks stemming from
higher than expected oil prices, a further decline of the euro and
possible moderate second-round effects following wage agreements in the
first half of 2012.

The Finance Ministry said last week that the moderate increase of
labor unit costs and stronger wage hikes this year “are currently no
inflation risk.”

ECB President Mario Draghi said earlier this month that “inflation
expectations remain well anchored and there’s no inflation risk in any
euro area country.”

Producer price inflation in Germany continued to slow in May,
falling to its lowest level in almost two years and adding to evidence
that pipeline pressures are easing.

For detailed information see data table on MNI MainWire.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

Not good……. but an improvement on forecasts of -8.2% y/y and last month’s reading of -10%

• Sees agreement on procedures at EU summit (wow, that certainly whets the appetite)

All sides cranking up the rhetoric ahead of tomorrows’ EU summit.

Personally feel the summit could end up being a complete clusterfuck, but then that’s just me.  Hope I’m proved wrong……

May: -0.7% m/m, +2.2% y/y
April: -0.5% m/m, +2.3% y/y
March: +0.7% m/m, +3.1% y/y
–

FRANKFURT (MNI) – German import price inflation continued its
downward trend in May, reaching its lowest level since the start of
2010, as energy product imports grew cheaper, the Federal Statistical
Office reported on Wednesday.

After a 0.5% downturn in April, May’s 0.7% slide brought overall
import prices to four-month lows only 2.2% higher than one year ago.

As Brent crude slipped more than 7% in May, imported oil was 4.5%
cheaper (+7.2% y/y), while the price for petroleum product imports
was down 6.3% (+7.6% y/y)

Excluding these two components, core import prices managed to climb
0.2% on the month and 1.4% on the year.

Weakening oil demand and Saudi Arabian production at a 30-year high
helped to bring oil prices under $90 a barrel in the latter half of June
for the first time since early 2010 and well below June 2011′s average
price of $114.91.

Still, near-term developments in the oil market remain uncertain,
the International Energy Agency warned earlier this month: “Looking
ahead, if the Eurozone or Chinese economy slows more quickly than
envisaged here, weaker customer demand would naturally see producers
scale back output.”

“A simple extrapolation of current OPEC output through end-2012
could indeed result in OECD stock overhang,” the IEA noted. “But
equally, starting from our base case assumptions, and adjusting for
potentially lower Iranian output on the one hand, and for some further
Chinese crude buying on the other, leaves an outlook that is hardly
overflowing with oil.”

A recent Bundesbank report downplayed the impact of rising oil
prices on the German economy compared to other industrialized nations,
including the United States and Japan.

“The negative impact on the German economy should be comparatively
small, due to relatively lower utilization intensity, closer trade
relations with [oil] exporting countries and generally strengthened
adaptability and resilience,” the central bank said.

Often the first to reflect commodity price trends, imported
intermediate goods prices were flat between April and May and down 0.7%
compared to last year. Capital goods imports were 0.1% more expensive on
the month for a 1.6% rise on the year, while imports of consumer goods
were 0.4% more expensive, bringing the annual rise to 3.3%.

Export prices also fell in May, slipping 0.1% to cut the annual
rise by 0.2 percentage point to 1.6%, its slowest pace since February
2010, the statistics office added.

– Frankfurt bureau: +49-69-720 142; email: frankfurt@marketnews.com –

[TOPICS: MTABLE,M$G$$$,MAGDS$,M$XDS$,M$X$$$]

GERMANY DATA: May import prices -0.7% m/m, +2.2% y/y; April +2.3% y/y
– Germany May export prices -0.1% m/m, +1.6% y/y; April +1.8% y/y
– Germany May ex-oil/oil products +0.2% m/m, +1.4% y/y
– Germany May import prices: energy goods -3.7% m/m, +7.7% y/y
– Germany May import prices: oil -4.5% m/m;natural gas -0.3% m/m
– Germany May import prices: petroleum products -6.3% m/m
– See MNI MainWire for details