Germany calls for Greek bond swap save time (AP)

By DAVID McHUGH and GABRIELE STEINHAUSER, AP Business writers David Mchugh and Gabriele Steinhauser, Ap Business writers - Wed Jun 8, 4: 34 pm EST

Frankfurt, Germany - Minister of Finance of the Germany, said the private creditors must share the burden of any financial assistance more high for the Greece under an agreement to prevent, by default on its debts.

In a letter to officials dealing with the debt crisis and obtained by the Associated Press Wednesday, Wolfgang Sch?uble suggested an Exchange that extend repayments of the debt by seven years and Athens to give time to reform its economy.

Such an approach has already been strongly opposed by the ECB in the field, that it could spread unrest through the financial system of the continent, then the ratings agencies have warned, it could be considered as a defect.

In the letter of Mr. Jean-Claude Trichet, the President of the European Central Bank, the Monetary Fund interim management International Director John Lipsky and other finance officials, said bond - so far spared losses that the countries of the euro area were rescue of Greece, the Ireland and Portugal - should be a "substantial and quantified contribution" for the new aid package reviewed by the Governments of the euro and the Monetary Fund International.

The best way to do that, it was said, was to swap the existing Greek bonds for new bonds which could extend their maturity in seven years. Sch?uble is one of the Finance Ministers of the euro area trying to find an agreement on a new package of aid for the Greece in time for the next formal meeting on 20 June.

He said that expect the Greece need for a "substantial" increase in aid.

"At the same time without another disbursement of the funds before July, we face the real risk of the first default unorderly in the euro area," it said.

In the letter, said any deal June 20 "" must include a clear mandate - to Greece, possibly with the IMF - to begin the process to involve Greek bonds holders.""

"Such a result can best be achieved through an exchange of link leading to an extension of Greek sovereign bonds in circulation by seven years, at the same time giving Greece the time needed to fully implement the necessary reforms and regain the confidence of the markets," said.

The idea may face the opposition of the ECB, which has flatly opposed any restructuring of the Greek debt that would bond with less than full value. ECB officials said that such an approach would be inflict losses on the unstable Greek banks which the Government can afford sick bail and could make it more difficult for other countries to borrow money on the bond market because investors would fear the possibility that similar measures.

The ECB has even threatened to ban the use of the obligations of the Greek Government as collateral for Central Bank credit to Greece does what he considers a restructuring of its debt. Rock, which would be the Greek banking system, which is based on the support of the ECB, because banks can not find credit elsewhere.

The Greece received a package of international rescue (161 billion dollars) last year European billion, but is still the difficulty come with money to pay its debts, as it is considered too risky to borrow on the private bond markets.

The risk of Greece running money next year, as banks and investment funds reluctant to buy bonds of the country, which remains stuck in recession and is struggling to reduce its large budget deficit. Some rich nations are opposed to put more money without obtaining the private creditors share the part of the load.

A spokesman of Monetary Affairs Commissioner Olli Rehn of the Union - one of the recipients of the letter - said Wednesday that no decision on the exact nature of the participation of the private sector has been made, but that officials of the euro area are currently seeking a several options, including asking banks and other financial institutions to keep their loans in Greece at its current level or to extend the deadlines for repayment for bonds that they hold.

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Steinhauser contributed Brussels

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Germany sees IMF and EU remain involved in Greece (Reuters)

BERLIN (Reuters) - Germany expected of the European Union and the Monetary Fund International remain jointly involved in any program of continued assistance to the responsible Greece of debt, a spokesman for the Ministry of finance said Wednesday. The comments contradicted an earlier report in the daily Frankfurter Allgemeine Zeitung, which had said that it seems certain that the IMF would not contribute its share of the next tranche of assistance under the Greece international rescue plan.

"It is a joint program which specifies, the IMF and participated in the (EU) Commission," Martin Kotthaus said at a regular press conference.

"It has been designed jointly." It will be evaluated jointly, and I suppose also that it can only be pursued jointly, including when it comes to the question of future instalments payments. ?

The inspectors of the "troika" of EU inspectors team, the IMF and the European Central Bank are in Athens to decide to release a tranche of 12 billion euros ($17 billion) the month next to keep afloat Greece.

In part due to requirements of the IMF, discussions on a new package that would meet the needs of the Greece up to 2014 are also underway, and countries are eager to see what measures Athens will take to regain credibility, for example with its privatization.

"Is not clear how these announcements of privatization and plans can be executed in concrete terms, physically, and understandable so that all other delays and others can be avoided," said the Germany Kotthaus.

He added that private creditors should participate in any solution to the woes of the debt of the Greece and not to leave all the burden for Governments to shoulder.

He said "should the taxpayer must be willing to give the Greece more space to breathe, then it is natural that private creditors should participate in such a project,".

"I can't say what specifically like at the moment, because we always await the report of the troika," Kotthaus said, adding that he did not wait for the reports before the Friday evening or perhaps even on Saturday or Sunday.

(Reported by Christiaan Hetzner, Brian Rohan;) (Editing by Ruth Pitchford)

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Germany decides to abandon nuclear energy by 2022 (AP)

BERLIN - economic power of Europe, Germany, announced Monday to abandon nuclear energy over the next 11 years, describing an ambitious strategy following the disaster of Fukushima at the Japan to replace the atomic power with renewable energy sources.

Chancellor Angela Merkel said that she hoped the transformation in more solar, wind and hydro energy serves as a roadmap for other countries.

"We believe that we can show those countries that decide to abandon nuclear - or not start to use it - how it is possible to achieve growth, create jobs and economic prosperity while moving renewable energy supply,"Merkel said.""

Merkel Government said it will be closed all 17 nuclear power plants in Germany - Europe and the fourth largest economy in the world of the largest - by 2022. The Government had no immediate estimate of the overall cost of the transition.

The plan defines the Germany out most of the other major industrialized countries. Among the Group of eight countries, only the Italy abandoned nuclear energy, which was rejected in a referendum after the 1986 Chernobyl disaster.

The decision represents a remarkable about-face for the Government of center-right of Merkel, who only late last year pushed through a plan to extend the lifetime of the reactors in the country, with the last scheduled to disconnect around 2036. But Merkel, who holds a PhD in physics, said industrialized, "powerlessness technologically advanced of the Japan" in the face of the disaster in Fukushima him rethink the risk technology.

Gradually the nuclear energy in a decade will be a challenge, but it will be possible and ultimately Germany a competitive advantage in the era of renewable energy, said Ms Merkel.

"As the first big nation industrialized, we achieve such a transformation to efficient and renewable energy with all the possibilities brings exports, develop new technologies and employment," Merkel told journalists.

The Government stated that the renewable energy sector has already employs approximately 370,000 people.

Seven reactors of the Germany's oldest, already disbonded grid pending safety inspections following the disaster of March at the Fukushima Dai-ichi from the Japan nuclear plant, will remain permanently offline, said Ms Merkel. Plants accounted for about 40 percent of the capacity of nuclear power plants in the country.

At the time of the disaster in Japanese, Germany a little under a quarter of its electricity from nuclear energy, on the same share as in the United States.

While the Germany has already set to abandon nuclear energy subsequently, the decision - which still requires parliamentary approval - considerably accelerates this process. Environment Minister Norbert Roettgen said there are no provisions that would allow a more later reverse policy.

"We do not want only to give up energy nuclear in 2022, we also want to reduce our CO2 emissions by 40 percent and double our share of renewable energies, 17% today and then 35 percent," said the Chancellor.

Angela Merkel stated that the cornerstones of the energy policy of the Germany will also include a safe and stable food that rely on imports and an affordable price for industry and consumers. The plan provides for more investment in natural gas plant as a backup to prevent blackouts, said the Chancellor.

The Germany initiative received a sceptical welcome abroad.

French Prime Minister Fran?ois Fillon, the country relies on nuclear power to produce 80 percent of its electricity supply, insisted "there is no" for the EU to achieve its goals of reducing emissions to at least a certain nuclear power.

"We respect this decision, but it does not change our policy," Fillon said. France operates more than one third of nuclear reactors in the EU.

Minister for the environment Andreas Carlgren of the Sweden also criticised the German decision, telling Associated Press that focus on an end date was regrettable and could travel to the price of electricity across Europe.

Germany, usually a net exporter of energy, has sometimes had to import energy since March, with seven reactors old shut and others temporarily grid for regular maintenance. However, the agency supervising its electricity network, DENA, said Friday that the country is self-sufficient and its capacity for the production of renewable energy in the spring peaked at 28 gigawatts - roughly the equivalent of 28 nuclear reactors.

Many Germans were fiercely opposed nuclear since sent Chernobyl radioactivity on the country. Tens of thousands of people took to the streets after Fukushima to urge the Government to close the reactor quickly.

A dozen years, there is a centre-left Government has developed a plan to abandon for good technology in 2021, due to its risks. But the Merkel Government last year amended to extend the life of plants on average 12 years – a political responsibility after Fukushima was struck by the March 11 earthquake and tsunami of the Japan.

Environmental groups welcomed decision of Berlin.

"The country is to throw its weight behind a clean, renewable energy to power its manufacturing base and in other countries as Great Britain should take note," said Robin Oakley, Director of Greenpeace's United Kingdom campaigns.

German industry, said that the Government should not allow the policy changes to lead a unstable power or increase the price of electricity.

Hans-Peter Keitel, President of the Federation of German Industries, urged the Government not step to set the date of 2022 in stone, but be flexible if problems arise.

In Switzerland, where nuclear energy produces 40 percent of electricity, also announced last week it intends to close its reactors gradually when they reach their average lifespan of 50 years - which would be the last plant off-line in 2034.

Decision of the Germany largely follows the findings of a commission of Government intervened on the ethics of nuclear energy, which Saturday, delivered recommendations on how to abolish the technology.

"Fukushima was a dramatic experience, see it as a nation of high technology cannot cope with such a disaster," Matthias Kleiner, co-Chairman of the commission, said Monday. "Nuclear energy is a technology with too many risks inherent in it impose on us or our children."

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Geir Moulson Berlin, Malin amounting to Stockholm, Colleen Barry in Milan, Jamey Keaten in Paris and Cassandra Vinograd London contributed reporting.

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Germany, France propel the euro area. Gulf of growth widens (Reuters)

Brussels/BERLIN (Reuters) - powerful performances by the German and French economies propelled the growth in the eurozone well above forecasts in the first quarter while also highlighting the gap between the high and low block.

The monetary area 17-nation expanded by 0.8 percent in the first three months of the year, data showed Friday, fueled by the stunning 1.5% of GDP in Germany, while the French economy grew by 1.0 %driven in part by consumer demand.

Economists had expected a 0.6% euro-zone growth. Analysts said better than expected - despite the recession return Portugal, data Greece still buried under a mountain of debts - reinforced the case to higher rates of European Central Bank in July, which would be the second this year.

Germany and the France represent domestic product gross area almost half. The two nations rebounded to a modest showing in the last quarter of 2010 when bad weather hit the exit.

The euro received a lift of the German numbers and jumped to touch $1.4330 briefly on the release of the number of the euro area.

"It is almost certainly as good as it gets for the euro area, growth seems likely to moderate in the coming months, said Howard Archer, Economist at IHS Global Insight."

The European Commission forecast quarter quarter, Eurozone growth would slow to 0.3% in the second quarter and then stabilize to 0.4% for the next two quarters.

"Nevertheless, it is now seems a very decent chance that the growth of the GDP of the euro zone will be up to 2.0% in 2011, for the first time since 2007," Archer said.

The European Commission was less optimistic, sticking to its projection of February in the growth of 1.6% this year, with inflation above target of two per cent of the ECB. In 2012, he expects a growth of 1.8% euro area.

By contrast in Germany, a top economic adviser to the Government, Wolfgang Franz, told ARD television, the country's economy could increase by 3 percent or more this year. The Commission expects German growth of 2.6% this year.

Analysts were somewhat more pessimistic on the France, saying that it was probably his high water mark.

"The recent surge in oil prices is likely to erode the purchasing power of households, while he also began the company profits, leaving its mark on the consumption and investment." In addition, we anticipate upcoming austerity more and more to the forefront, "said Joost Beaumont, an economist at ABN-AMRO.

Driveway Italy bucked the trend, only 0.1% in the first quarter, posting the same low rate as the last three months of 2010. The Government provides a 1.1% growth this year and the only 1.0% Commission.

For more indebted eurozone economies, strong growth is a distant dream.

The economy of the Portugal reduced 0.7% in the first quarter, sending the economy into recession. His Government has admitted that, after a rescue plan, its economy will decrease this year and next. The Commission expects contraction of 2.2% in 2011 and 1.8% in 2012.

The Greece actually achieved quarterly growth - 0.8% - for the first time since the end of 2009, but following a vicious contraction of 2.8% in the last quarter of 2010.

The Commission expects to Athens to announce new austerity measures this year to achieve the objectives of its rescue plan. It provides that the economy decreases 3.5 percent this year if the policies are unchanged, but anticipates a growth of 1.1% in 2012.

Spain has won support for its efforts to convince the markets he can avoid being sucked into the debt crisis - more expanded economy 0.8 percent on an annualized basis, its rate strong since the second quarter of 2008. On the quarter, growth was 0.3 per cent.

ECB SET FOR HIKING IN THE SUMMER?

Analysts, has declared that the ECB appeared ready to increase rates again in July, after having traveled for the first time in two years last month, despite the gap between rich and poor in Europe.

"The euro area will have a decent first half of the year... and I am sure that when going to the meeting of June assume no crisis in the financial sector by then, the ECB will prepare the ground for an increase in rates in July," said Ken WattretEconomist at BNP Paribas in London.

Thursday, the Monetary Fund International said that the debt crisis could extend even to core nations.

In his last report on Europe, the Fund said it is willing to give to the Greece more aid if the country needed and urges the ECB to adopt a cautious approach to the increase in rates, adding the tactic is to provide free liquidity of limit to the banks of the euro area may be necessary to be extended.

But with inflation in the eurozone more since the financial crisis hammered the economy at the end of 2008, the markets expect the Bank to look beyond the debt crisis and increase the rate of 1.5% in July and once again before the end of the year.

(Written by Mike Peacock and Jan Strupczewski.) (Editing by Catherine Evans/Ruth Pitchford)

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Germany powers eurozone economic surge (AP)

LONDON - with better forecasts of economic growth in Germany and a surprise rebound in Greece, contributed to the 17-nation euro zone begin the new year with a bang, with the region of growth twice faster than the United States despite constant fears about the debt.

Of the euro area economy expanded by a quarterly rate of 0.8 per cent in the first three months of the year, according to Eurostat, the EU statistical office Friday.

It was more that double the growth of 0.3% posted in the previous period of three months, prior to the expectations of analysts for an increase of 0.6 per cent and twice the US growth.

"The euro area is therefore considerably outperforming all other large developed economies at the moment," said Chris Williamson, Chief Economist at Markit.

The figures have cemented expectations that the European Central Bank will be followed by an increase in the interest rate for April - the first in nearly three years - with another, possibly in July, despite the problems of indebtedness of some countries.

In terms of year on year, the economy of the euro area increased by 2.5%, at approximately that many observers believe should be its long-term average.

Olli Rehn, European Commissioner for economic and Monetary Affairs, said that the EU will surpass the levels of pre-financial crisis growth next year.

It is much earlier than planned in 2008, when the economy sank into its deepest and longest recession after the collapse of the US investment bank Lehman Brothers has put the financial system to its knees.

"The main message in our forecast is that the economic recovery in Europe is strong and continues, despite recent external turbulence and tension on the sovereign debt market," said Rehn.

The new Commission forecasts are for the euro zone to grow by 1.6% this year and the enlarged EU of 27-nation, which includes members other than the euro as Britain, 1.8%.

Unsurprisingly, given its size, the Germany was the main reason that the euro area has grown so fast in the first quarter. Growth of 1.5% means that most large economy of the European Union has made all the production lost during the recession. He was taken by a healthy balance of exports and household spending.

"The Germany is the engine of growth among the industrial countries - and not only in Europe,"stated the Minister of the German economy Philipp Roesler."."

Economy of the France, second largest in the eurozone, expanded by a solid 1 percent on higher consumer spending and business investment. The economies of the North as the Netherlands have increased strongly, while the Italy and the Spain late.

Perhaps more surprising, given the quagmire of debt that is, Greece posted solid growth of 0.8%, its first economic growth since the fourth quarter of 2009. However, the increase is not likely that a sign of a sustained pick-up as the contraction of the previous quarter has doubled a colossal 2.8%.

Manos Chatzidakis, head of investment strategy at Pegasus Securities, said that the Greek figures were disappointing because of the revision.

"The economy still has a considerable way to go before recovery," said Chatzidakis. "We remain in a very unfavourable situation."

Portugal, another beneficiary of rescue, returned in a recession. Its quarterly decline of 0.7% following the 0.6% decline recorded in the previous three month period - a recession is classified as two consecutive negative growth quarters. The Portugal is the third country of the eurozone to agree to a rescue, following the Greece and the Ireland.

Problems of these countries are likely to be protracted as they struggle to reduce their mountain of debts. It is to these problems, including those in the Greece, which continue to dominate sentiment towards the euro.

The Executive Board of the European Union, on Friday raised its forecast of debt for the three of them.

This will probably spices discussions between the Governments of the euro on the question of whether if the Greece will need a second rescue plan. It will also fuel calls from many economists who say that the Greece have to restructure its debts - to delay or reduce its bond payments. Ministers of the euro zone will begin to discuss how to help the Greece at a meeting Monday.

Although growth has contributed to the euro for some time, the broader concerns of the debt crisis has prompted a modest retreat.

By times of London late afternoon, the euro declined 0.1% to $1.4222, after having traded as high as $1.4338 earlier. Last week, it was near 18-month highs above $1.49 before that disorders of the Greece most recent debt began to dominate sentiment.

Despite of underway in the eurozone debt crisis, the European Central Bank should continue to increase the rate of interest over the next few months, especially as the economic recovery is becoming rooted.

"Performance solid growth of the economies of power plants in the EU is the European Central Bank, in a more difficult situation uncomfortable" said Tim Ohlenburg, Senior Economist at the Centre for Economic and Business Research.

"High interest rates would make sense for large countries, the Centre of the euro in which unemployment is falling and exit is back, but it would further undermine the weaker economies with high debt levels and fragile banking sector".added Ohlenburg.

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Gabriele Steinhauser Brussels, Geir Moulson Berlin and Nicholas Paphitis in Athens contributed to this story.

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Germany swear the that of the labour market more checks (AFP)

BERLIN (AFP) - the German Government asked Sunday to calm fears of a flood of cheap labour as the largest economy in Europe, with the Austria breaks the restrictions on Communist workers in eight countries of the EU.

Minister labour Ursula von der Leyen "at least 100,000 people in eight countries of Eastern Europe will come here every year," said the mass daily Bild am Sonntag.

But she has promised an increase in controls on construction, food and health care industries to ensure that the workers were paid the minimum wage, if applicable, and that they were properly registered.

And she noted that those who arrive in Germany would not be a drain on the welfare of the Germany State.

"The vast majority will be workers young, educated and mobile", she said.

Germany and Austria, and non - EU Switzerland, Sunday opened their labour markets to citizens of the Poland, Czech Republic, Hungary, Slovenia, Slovakia, Estonia, Lithuania and the Latvia, who all joined the EU in 2004.

The Germany and the Austria were the last remaining bastions in the EU, which now has 27 members, having imposed on seven years of "transition periods" to restrict access.

Some sectors of the economy booming the Germany complained of a shortage of skilled workers and have been recruiting actively at trade fairs in Europe before May 1, abandonment of restrictions.

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