The price of gasoline at the pump hit new highs Friday in France, according to data released Tuesday by the Ministry of Sustainable Development, those of diesel playing in contrast to the decline. The price of a liter of unleaded 95 euro climbed to 1.5640, while that of unleaded 98 (whose sales are much lower in SP95) rose to 1.6022 euro, surpassing both levels records they had met in January, according to figures compiled by the Directorate General for Energy and Climate (EDCM).  

However, diesel is still trending down, to 1.3960 euro per liter last week against a peak of 1.4240 in mid-January, and well below its spring 2008 record (1.4541 euro ). These are national averages calculated by the DGEC from data provided by service stations.

This surge is linked to two phenomena, geopolitical tensions (Iran, Nigeria …) that keep crude oil prices at very high levels, and weakening of the euro against the dollar, which increases the cost of black gold imported into France, once its price converted into the single currency. Diesel sales represent about 80% of French consumption of motor fuels, the unleaded 95 just under 15% and unleaded approximately 98% 5.

The debt crisis in Europe has almost been forgotten that the U.S. also face their great difficulties on their debt. European stock markets closed sharply lower on Thursday. Paris (-3.4%, below 2900 points), Frankfurt (-3.5%) and London (-2.6%) fell sharply in the wake of Wall Street lost more than 2% at the end of the afternoon. Democrats and Republicans should agree on a plan to save 1,200 billion over ten years to hold their huge debt. But after two months of negotiations, they were still far from an agreement a few hours from the end of negotiations scheduled for Monday evening.

Congress had in effect established a commission to decide on a plan to reduce debt. Composed of twelve members of Congress – six Republicans and six Democrats – the "super-committee" was intended to relieve an abysmal debt that comes to exceed 15,000 billion (you can see it evolve in real time on the www . usdebtclock.org). The six Democrats proposed a plan for 2900 includes 1,300 billion billion tax increase, the six Republicans on the other hand opted for a plan of 2,200 billion euros, with "only" 200 billion of tax increases. Without ever reaching a consensus.

Why the lock?

This blockage occurs less than a year of presidential elections scheduled for November 2012.

The Economist, 68, former European Commissioner and now president of Bocconi University in Milan, is seen for weeks by the markets as the best candidate to lead a government of national unity and implementation of emergency austerity measures needed to redress the accounts of the country.The Paris Bourse was almost in equilibrium, Frankfurt advanced 0.5% and London gave up 0.45%.

Discussions in the PDL

Italian President Giorgio Napolitano has appointed Mario Monti senator for life Wednesday. Investors saw this as a sign that he would ask him to try to form a government from the start of Silvio Berlusconi, expected in the coming days.

And as the cost of borrowing to ten years in Italy continue to grow beyond 7%, a level deemed unsustainable by many, the assumption of a unity government seems to be gaining ground in the PDL.

"The LDP can not simply follow the call to the polls that emanates from the core," said Foreign Minister Franco Frattini in an interview with Corriere della Sera.

"We note the intention of the Greek authorities to hold a referendum," write the European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso in a joint statement.

"We believe that this agreement is the best for Greece.We have every confidence in Greece to honor the commitments made to the euro area and the international community. "

José Manuel Barroso and Herman Van Rompuy added that they spoke with Greek Prime Minister George Papandreou and said that the referendum question would be discussed on the sidelines of the G20 summit in Cannes, which runs from November 3 to 5.

Economists polled by Reuters had expected that the unemployment rate in the fourth largest economy in the euro area, the highest in the European Union, remains unchanged from the second quarter.

With demand strong, the world's largest earth-moving machinery and equipment for the mining industry posted net earnings of $ 1.14 billion, or $ 1.71 per share, against 792 million, or 1.22 dollar per share, a year earlier.Analysts polled by Thomson Reuters I / B / E / S on average expected $ 1.54 per share.

In pre-market, the title earned 3% after these announcements.

The turnover stood at 15.72 billion dollars between July and September, up 41%, the group called a record, as the market anticipated 15.03 billion dollars.

For all of 2011, Caterpillar said he expected sales to about $ 58 billion, including its recent acquisition of Bacyrus, whereas previously anticipated sales of between 56 and 58 billion.

Earnings per share are now expected to 6.75 dollars for the year, on top of an initial forecast range from 6.25 to 6.75 dollars.

For 2012, Caterpillar expects its sales climbed 10% to 20%.

Meeting in Brussels, they also discussed at length the contours of the new rescue plan for Greece and the participation of banks capable of reducing the Greek debt to sustainable levels.

A report prepared by the "troika" – IMF, ECB and European Commission – representing the international donors, a 50% discount on Greek bonds held by private investors is necessary to reduce the debt to 120% of GDP against 162% today.

If it was intended to reduce debt below 110%, a discount of 60% would be necessary, the report says, as a basis for decisions of Heads of State and Government of the euro area summits on Sunday and Wednesday.

The outcome of these meetings, which should lead to a new Greek plan, a formula to maximize the funds to support the euro area and a wide recapitalization of banks on the continent, is considered crucial for the single currency.

"We decided to authorize the payment of the next tranche of financial assistance to Greece in the context of the current program of economic adjustment.The disbursements must be made in the first half of November, once approved by the International Monetary Fund, "said the finance ministers of the euro area in a statement.

Athens immediately welcomed the European decision, saying it was "a positive step."

The decision "provides the fiscal targets in 2012 and paves the way for necessary structural reforms," ​​said Greek finance minister, Evangelos Venizelos, in a statement.

CONTINUATION OF DISCUSSION ON EFSF

According to several sources, the Europeans, however, remain largely divided on the level of the discount to be applied to Greek bonds as well as the voluntary and non-bank participation.

The German authorities, in particular Finance Minister Wolfgang Schäuble, insist that the envelope of 50 billion euros negotiated on July 21 is significantly revised upwards, if necessary by forcing banks to make an extra effort.

Paris is reluctant for fear of triggering a credit event with unpredictable consequences.

The ministers, however, only discussed the various options available to "maximize" the firepower of the EFSF, which also divides Paris and Berlin.

The Minister of Economy, Baroin said that France continued to believe that the conversion of cash in bank was the best solution but it did not make "one final point of confrontation."

"What counts is what works.And what works is what will go towards deterrence and effective firewall and it is around this that we try to work, "said the Minister after the meeting.

Granted a banking license in EFSF would allow access to funding from the European Central Bank to increase its capacity for action by a factor of up to five.

But Berlin rejects this possibility, which would be to accept that the institution of Frankfurt finance the countries of the euro area, one of the dogmas explicitly excluded by the European treaties.

The other members of the euro area are also divided, Belgium and Spain having voted for a reconciliation BCE-EFSF while Slovakia and Austria have indicated that this solution was not studied.

The countdown has started, however, for not only the peaks of Sunday and Wednesday but above the summit of Heads of State and Government of the G20 in Cannes in early November.

Thursday night, U.S. President Barack Obama spoke on the economic situation in Europe with his French counterpart Nicolas Sarkozy, German Chancellor Angela Merkel and British Prime Minister David Cameron.

"We need better regulation and better capitalization of banks," he said.

"Everyone will not like this, but it is the best way there is no escalation of the crisis caused by a collapse of the banking system."

"The cause of this crisis is too much debt, but we must fight the danger of contagion. We must simply recognize that banks currently have more trust towards each other, so the market Banking is not working as it should.The best way to combat this is a better recapitalization. "

While being held in Paris the meeting of G20 Finance Friday and Saturday, the market hopes to see political leaders overcome their differences to meet a debt crisis that threatens the stability of the euro area and the strength of the European banking system.

"For now, investors give them the benefit of the doubt," said Patrick Moonen, strategist at ING Investment Management, in a note entitled "Good luck to political leaders."

Pending the outcome of the meeting of finance ministers and central bankers of the G20, the surveillance by Fitch notes several banks – including Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank or Societe Generale – show the difficulties faced by banks today.Difficulties that have driven the last weekend the French-Belgian Dexia decommissioning.

In exchange, the banks Friday was the only sector to finish down in Europe (-0.59%).

The President of the Eurogroup Jean-Claude Juncker reiterated Friday that several European banks needed to be recapitalized.

The crucial step remains the European Council of 23 October at which Germany and France will unveil their proposals for overcoming the crisis. Both countries said they already sealed their agreements without specifying its content.

"We have never been so close to a solution (to the debt crisis, Ed). But this is not done," warns David Thebault, head of quantitative trading at Global Equities."There is concern that the market takes it badly if there is no announcement of precise and detailed plan on October 23 and November 3 (G20 Cannes, Ed).I remain cautious. "

The Franco-German proposals will include a bank recapitalization and strengthening the response capacity of the European Financial Stability Fund (EFSF).

SIX MONTHS to recapitalize

In preparation for the European Council, the European Banking Authority (EBA) provides a new set of stress tests of the banking sector.

Stricter than the previous year this time should include a valuation of sovereign debt, particularly that of Greece, at market value, and the EBA should require banks a minimum capital ratio "hard" ("core tier one") of 9% and not only by 7%.

According to European sources, the weakest banks will then have six months to build up their capital.

"The only real justification for recapitalization would be to reassure the markets," said Laurent Quignon, head of economics at BNP Paribas bank.

"But in terms of economic fundamentals, there is no more reason than all the banks are recapitalized today than yesterday."

According to Goldman Sachs, at least 50 out of 91 European banks could fail the new stress tests, indicating a need for 139 billion euros in fresh capital.

The terms of a bank recapitalization on the Old Continent will be the subject of intense negotiations from Monday, said President of the Eurogroup.

"LESS DIVIDENDS, BONUS UNDER"

The French government has already said that the State was ready to help banks, but for now it emphasizes the strengthening of capital by private capital, unlike what was done in 2008 and 2009 under the plan to help French banks after the collapse of Lehman Brothers.

"Banks will have to recapitalize on the basis of their results by distributing less dividends and less bonus," said Friday morning the Minister of Economy Baroin, Europe 1.

"If they can not, they will do in the markets.If markets are not sufficient, they will find partners and, ultimately limit, there will be an opportunity for European coordination. "

"For France, I want to say that I am confident in the ability of our banks to raise their profits and all means at their disposal to strengthen their capital base," added the Prime Minister Francois Fillon, in the afternoon during the parliamentary days of the UMP.

In line with the German position, France has already ruled out recourse to EFSF to recapitalize its banks.

"Policies must resolve the dilemma between the private shareholders of banks that do not want to hear about dilution and the market which requires recapitalization," said Christophe Nijdam, an analyst at AlphaValue.

"The calls for recapitalization by the European authorities can be cons-productive to the extent that they contribute to fuel concern for all banks," warns Laurent Quignon, at BNP Paribas. "What can paradoxically make raising capital more difficult for institutions that need it."

Deutsche Bank, which would need to raise 9 billion euros according to sources, has made it clear that it would avoid any forced recapitalization.

The last step seems to be the most difficult to cross to Europe. Slovakia is the 17th and last country in Europe to vote on strengthening the European Financial Stability Fund (EFSF), and part of the coalition threatened not to accept the text. Without the approval of Bratislava, the plan can not enter into force in accordance Amadeu Altafaj-Tardio, spokesman of the European Commission for Economic Affairs. Interview.

Slovakia Can Europe block?

We hope there will be a positive vote in Bratislava.But if Slovakia did not accept the text, the plan will remain outstanding. And if the vote is negative, the plan falls apart. The EFSF will then remain in its current state but will not have the means to ensure the protection of the euro, as it is supposed to do in its new form.

Ratification does not seem won …

We're not there yet. The Slovak authorities have committed heavily to vote the text. Besides the Prime Minister Iveta Radicova has resigned on the table in case of refusal of the plan by the coalition. Our message was to the Slovak authorities to say that strengthening the EFSF is in their interest. It may be very useful to the country if the crisis in the euro area spreads.

Can you put pressure on Slovakia?

What do you want, the Commission took power in Bratislava? We can not force the country to ratify the plan.This is the responsibility of all political actors. We can not require Member States is in the nature of the European Union. States have decided to vote the text unanimously in 2010 against the advice of the Commission. If we had done by a qualified majority, we would not be here.

This is not the first time that Slovakia played bad students …

We have already had a fantastic story with this government. Parliamentary elections in 2010, Prime Minister of the country – currently in power – has campaigned on his opposition to help countries better off than him. Then, the arrival of Iveta Radicova as Prime Minister, the party decided in June to stop its bilateral loans to Greece in the forefront of support. The decision was taken after the second installment.It is now the sixth …

Part of the coalition claims to be exempt from participating in EFSF (7 billion euros 440 billion in total). Can we modify the agreement to allow Slovakia to vote on the plan?

The agreement was ratified by 16 member states before it, we can not change it for a country. What would the other parliaments have already voted if the text were changed to the Treaty? They could also claim their scpécifiques measures and find that it is unfair to make concessions to one country. Finland has obtained special guarantees with Greece to vote on the text. But these guarantees were part of the bailout.