Foreign Press: Hungary deficit miss, German recession, ECB’s Ireland blackmail

Here are some of the foreign language links from the last two days plus some in English that are related which I want to highlight.

First, there’s Hungary where the government’s fiscal position has deteriorated significantly with a big miss. The situation there is only made worse by an appreciating Swiss Franc, when many debts are in Francs. The Forint has been plummeting against all currencies. Most vulnerable: Switzerland, Austria and Italy (through UniCredit’s ownership of Bank Austria).

In Germany, I reported yesterday in the Credit Writedowns Pro that bank economists are predicting that Germany is already in recession and that GDP is expected to decline in Q1. That and the banking crisis are why yields are negative. Meanwhile, Hans Werner-Sinn thinks the Germans will be on the hook for periphery debt no matter how you slice it. But he sees the ECB’s printing money as the worst outcome by far. I suspect these views are being marginalised in the ECB. The view amongst Bundesbank types in Germany is that the ECB talks the talk but doesn’t walk the walk. It is not the Bundesbank as evidenced by the fact that a German is neither Chief Economist or ECB head. I will have a lot more on Germany at Credit Writedowns Pro.

In Ireland, the ECB tried to blackmail the previous government into the bailout they received without an option of haircuts and now the ECB is withholding the letter proving this. I think this is a serious issue so I have flagged it even though the article is in English.

In France, Eric Cantona, the former English football star, is running for President. Sarkozy is running behind his rival Hollande and the nationalist candidate Le Pen is getting a lot of attention. Regime change in France will be very significant and could seriously upset the apple cart if the austerity in France causes recession and social unrest/populism.

The last articles are on Swiss central banker Hildebrand where his banker says the wife phoned in the order and that Hildebrand was not involved and on the UniCredit situation; UniCredit shows that raising private capital will be a big problem for banks short of capital in Europe. Their shares have been crushed and we can expect similar outcomes with banks in France or Spain when they start dialling for euros.

• Ungarn: Defizit höher als zugegeben – Wirtschaft – KURIER.at

  In Ungarn vergeht kein Tag ohne Hiobsbotschaft: Am Montag mussten die Ungarn zugeben, dass das Budgetdefizit im Jahr 2011 mit 1,73 Billionen Forint (etwa 5,5 Mrd. Euro) rund zehn Prozent höher ausgefallen ist als zuletzt geplant. Laut Regierung beträgt das Haushaltsdefizit 6,2 Prozent des Bruttoinlandsprodukts (BIP). Das Ziel von 2,9 Prozent des BIP für 2011 sei allerdings nicht in Gefahr. Denn die im Vorjahr verstaatlichten privaten Rentenkassen seien noch nicht in die Rechnung einbezogen.

• Hans-Werner Sinn: „Wir sitzen so oder so in der Falle" – Deutschland – Politik – Handelsblatt

  Ifo-Chef Hans-Werner Sinn sieht Deutschland in der Zwickmühle: Falls die EZB die notwendigen Staatsanleihen-Käufe nicht tätige, werde das über den Rettungsschirm geschehen. Die Rechnung gehe sowieso an Deutschland.

• La vraie-fausse candidature d’Eric Cantona – LeMonde.fr

  "Je cherche 500 signatures", lance l’ancienne star du football Eric Cantona, 45 ans, aujourd’hui acteur, en une du quotidien Libération, ce mardi 10 janvier. Lundi soir, la lettre qu’il a écrite aux maires de France afin d’obtenir les cinq cents signatures nécessaires à une candidature à l’élection présidentielle a été mise en ligne sur le site Internet du journal, entretenant savamment le suspens sur l’objectif de sa démarche : on ne trouvait ainsi nulle part de déclaration officielle de candidature.

• German Yields Turn Negative – WSJ.com

  In an auction Monday, Germany sold €3.9 billion ($4.96 billion) of six-month bills that had an average yield of negative 0.0122%, the first time on record that yields at a German debt auction moved into negative territory.

• Ireland ‘may need new bailout’ – The Irish Times – Mon, Jan 09, 2012

  Ireland clearly needs to negotiate a stand-by second bailout, Citigroup chief economist Willem Buiter said during a visit to Dublin today.

• Grootste gasveld ontdekt in Nederland sinds 1995 – De Standaard

  De Nederlandse Aardoliemaatschappij (NAM) heeft een nieuw gasveld ontdekt. Het gaat om het grootste gasveld op het land sinds 1995. De gasvoorraad werd gevonden in het noordoosten van Friesland en zou ongeveer 4 miljard kubieke meter beslaan. Dat zei de NAM maandag.

• UniCredit: Größter Kursverfall seit 25 Jahren – Wirtschaft – Finanzierung – KURIER.at

  Die Kapitalerhöhung bei UniCredit hat an der Börse keine Fans. Ein Verkauf der Bank Austria gilt Experten als letzte Möglichkeit.

• Hildebrands Kundenberater nimmt erstmals Stellung (Wirtschaft, Aktuell, NZZ Online)

  In der Affäre um Nationalbank-Präsident Philipp Hildebrand nimmt erstmals sein Kundenberater bei der Bank Sarasin Stellung: Hildebrands Frau Kashya habe am 15. August den umstrittenen Dollar-Kaufauftrag in ihrer Galerie aus eigener Initiative mündlich erteilt.

• ECB refuses to hand over November 2010 threat letter sent to Brian Lenihan « NAMA Wine Lake

  The story of Ireland’s bailout in November 2010 has been partly told in dribs and drabs. Governor of the Central Bank of Ireland, Patrick Honohan said that the Minister for Finance in November 2010, the late Brian Lenihan was "crestfallen" when he learned from the ECB that Ireland couldn’t default even on the unguaranteed debts of the banks. The Governor went on to say that Minister Lenihan was "offered no room" for negotiation on the matter.