Europe plans its plan (updated)

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Another happy night on the European equity markets once again based on the hope that something may finally be being done to sort out Europe under a new “plan”. The EU summit has now been moved to allow some more time to work out what the “plan” might actually be:

The President of the European Union has announced he is delaying by six days next week’s EU summit, because leaders need more time to finalise a plan to fight a worsening eurozone debt crisis.

Herman Van Rompuy said leaders needed more time to conclude discussions on financial aid to Greece, the recapitalisation of banks and giving the eurozone bail-out fund more firepower.

The move follows yesterday’s meeting between the French and German leaders, who pledged action on the Eurozone crisis by the end of the month.

European stock markets rose today as traders took an optimistic view on the Merkel/Sarkozy meeting and its promise of big steps to deal with the eurozone sovereign debt and banking crises.

I know that the European markets are being optimistic, equity markets usually are, but the Italian Foreign Minster made it pretty clear that this latest “plan” is just another un-coordinated promise to do something. He isn’t even aware of what the details are:

But one person wasn’t happy about it: Italian foreign minister Franco Frattini, who was in Luxembourg for a meeting of EU foreign ministers, was upset the meeting was pushed back, saying the delay “risks sinking Greece”. He also told Italian reporters he was annoyed that France and Germany were again trying to drive the rest of Europe.

“Yesterday, we failed to understand what the substance of the meeting was,” Frattini said of the weekend summit between German leader Angela Merkel and her French counterpart, Nicolas Sarkozy. “There was no declared agenda and we don’t even know if there was a concrete agenda. It would be much better to re-launch a real [EU] community method and get all 27 around the table of the council of ministers without losing all this time.”

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Last night we also saw the nationalisation of Dexia by the Belgian government:

The Belgian government’s nationalization of the domestic unit of troubled bank Dexia SA received the go-ahead Monday after the bank’s board approved a rescue plan agreed to between the French, Belgian and Luxembourg governments.

The rescue plan, sealed over the weekend, sees the Belgian government acquiring the domestic retail unit for €4 billion ($5.35 billion) while the three governments extend €90 billion in guarantees for Dexia’s funding over the next decade.

For a painful reminder of just how bad banking oversight in Europe has been over the last few years please see this image from ZeroHedge.

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The EFSF ratification is now being discussed in the Maltese parliament. There are delays but it looks likely to pass after a resolution to push through the bill:

Acting Speaker Censu Galea gives ruling over procedure: Parliament authorises EFSF ratification and implementation. Parliament discussing amendments as Finance Minister asks for time extension to conclude and pass the bill today.

I’ll put up an update later in the day if there is a change in the outcome from Malta. The news is nowhere near as positive from Slovakia who is supposed to vote within the next 24 hours. After a 4 hour meeting the Slovak PM declared that no agreement had been reached and that:

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Slovak Prime Minister Iveta Radicova threatened on Monday to quit if her centre-right coalition does not reach agreement on Tuesday to expand the euro zone’s bailout fund, a government source said.

Approval has been held up by one of four members of Radicova’s ruling coalition, the liberal Freedom and Solidarity (SaS) party, which argues that Slovakia, the second poorest euro country, should not have to pay to save richer peers from debt.

If Radicova cannot get her coalition to approve the measure, she is still likely to win passage of it through parliament with support from opposition parties, but that could bring her government down and force early elections

In other news, Greece nationalised another bank and Portugal’s central bank warned of fiscal deficit slippage and recession, and the IMF flagged new short term lending facilities.

Update: In breaking news Malta has approved the EFSF… on to Slovakia.

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