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IMF chief sees big boost to lending organization on the horizon

International Monetary Fund (IMF) head Christine Lagarde said Thursday that she expects the lending organization to get a large financial boost by donors to help stem the eurozone crisis.

Greek debt talks: European economic daily round-up

Greek debt talks, IMF's Lagarde talks, financial markets talk

The Greek debt talks continued today. The sticking point remains the rate of interest bondholders will be paid on new issues of Greek sovereign debt. The idea is they will exchange their current bonds for new ones that are at least 50 percent less in face value. (Friday I saw speculation that they might be worth between 65 and 70 percent less.)

When you take that big a haircut now, you want something sweet to look forward to down the road. The Greek government doesn't want to give what's left of its future away to high interest rates on these new bonds. We'll see.


European economic news: today's round-up

Meetings, bank runs and some surprising good news for France
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AAA ratings of sovereign debt. France will keep hers, says rating agency Fitch (PHILIPPE HUGUEN/YouTube)

Let's start with the good news: Ratings agency Fitch announced France would keep its AAA rating for the rest of the year. A Fitch spokesperson in Paris said, "Fitch maintains its position from December. In the absence of important shocks that could be linked to a strong worsening of the situation in the eurozone, Fitch does not foresee modifying its negative outlook (on the ratings) before 2013."

Now, it's Europe, let's get to the bad news. In London, Fitch's managing director, David Riley, said Italy was the country that was most at risk of a downgrade. "The future of the euro will be decided at the gates of Rome," Riley told reporters.

The country's A+ rating could be lowered as soon as the end of January.


Hungarian government back tracks: a little

Foreign minister Janos Martonyi indicates controversial constitutional changes may be rescinded
Hungarian Foreign Minister Janos Martonyi surrounded by the stars of the EU. The EU is demanding the Hungarian government restore independence to its central bank as a condition of backing its request for bailout funds from the IMF. (GEORGES GOBET/AFP/Getty Images)

Debtors can't be choosers is the lesson for Hungary's extreme right-wing government. The government of Viktor Orban has brought in major constitutional changes in recent weeks The Hungarian opposition say these undermine democracy via rigid gerrymandering of electoral districts and restrictions on freedom of the press among other things.

The IMF, from whom Hungary wants more money, is exercised by constitutional changes that undermine the central bank's independence. So is the EU which must give its bona fides for Hungary to get the loan. No more money until that problem is fixed.


IMF chief warns of return to depression

Christine Lagarde says euro zone crisis can no longer be solved simply by the European nations themselves.
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IMF chief Christine Lagarde addressing the Women In Public Service event at the Department of State December 15, 2011 in Washington, DC. Lagarde said another depression was not out of the question. (Chip Somodevilla/AFP/Getty Images)
IMF chief Christine Lagarde says euro zone crisis can no longer be solved simply by the European nations themselves.
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