Thursday, December 13, 2012

20121213 1008 Global Markets Related News.

Asia FX By Cornelius Luca - Wed 12 Dec 2012 15:32:18 CT (CME/
The appetite for risk improved further, but temporarily, on Wednesday. The Federal Reserve met the market expectations and targeted 6.5% unemployment rate before tightening borrowing. In the meantime, the "fiscal cliff" game of politics remains in place, so the market will continue to swerve on rumors and information leaks. The European and commodity currencies extended their gains from Tuesday. The yen dug to a new low for its downtrend and is approaching the neckline of a long-term head –and-shoulders in the 1.1960 area. However, the US stock indexes gave up gains and closed flat. The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all European currencies. Good luck!

US: The Federal Reserve announced a new bond-buying program worth $45 billion per month of longer-term Treasuries.

Asian Stocks Rise Led by Japanese Exporters as Yen Falls (Reuters)
Asian stocks rose, with the regional benchmark index extending its longest rally in more than three years, as Japanese exporters advanced after the yen fell to an eight-month low versus the dollar. Canon Inc., the world’s biggest camera maker, climbed 2.3 percent in Tokyo as the weaker yen boosted the outlook for exporters. Mitsubishi UFJ Financial Group Inc. rose 1.6 percent as Japan’s No. 1 lender is poised to announce the purchase of Bank of America Corp.’s stake in their Japanese private banking venture. Iluka Resources Ltd. dropped 7.2 percent in Sydney as the world’s largest zircon producer said prices for the material will continue to decline.
The MSCI Asia Pacific Index (MXAP) gained 0.3 percent to 127.29 as of 9:37 a.m. Tokyo time, poised to advance for an 11th day, the longest winning streak since July 2009. Markets in China and Hong Kong have yet to open. The measure advanced 11 percent this year through yesterday as central banks took steps to support economic growth. The Federal Reserve said yesterday it will expand asset purchases and majority of the policy makers forecast it to maintain near zero interest rates until 2015. “There’s been a big move in the currency,” said Stan Shamu, Melbourne-based market strategist at IG Markets Ltd., a provider of equities, currencies and commodities trading services. “That’s the big positive for the Nikkei today and the exporters will be the ones that benefit.” Japan’s Nikkei 225 Stock Average increased 1.2 percent, while South Korea’s Kospi Index added 0.4 percent. Australia’s S&P/ASX 200 Index slipped 0.1 percent.

U.S. Stocks Erase Gain as Optimism About Fed Plan Fades (Reuters)
U.S. stocks erased gains as optimism about Federal Reserve plans to buy more bonds faded, with investor focus returning to the budget deadlock in Washington. Berkshire Hathaway Inc. (BRK/A) climbed 2.4 percent after lifting the threshold it will pay for stock, signaling Chief Executive Officer Warren Buffett views the shares as undervalued. DuPont Co. (DD) advanced 1.4 percent as the chemical maker announced a share buyback and said 2012 earnings will be at the high end of forecasts. Eli Lilly & Co. sank 3.2 percent after saying it’s conducting an added study for an experimental Alzheimer’s drug. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,428.48 in New York, erasing an earlier rally of as much as 0.8 percent. The Dow Jones Industrial Average slipped 2.99 points, or less than 0.1 percent, to 13,245.45. More than 6.6 billion shares changed hands on U.S. exchanges, or 6.3 percent above the three-month average, according to data compiled by Bloomberg.
“Traders have been poking holes in some of the Fed comments,” Michael James, a managing director of equity trading at Wedbush Securities Inc. in Los Angeles, said in an e-mail. “Nothing hugely ‘negative,’ just reason to be doing some selling with the strength we’ve had in the last couple days. Markets are very thin right now and subject to bigger swings this week.” Stocks rallied after the central bank said it will buy $45 billion a month of Treasury securities starting in January, in addition to $40 billion a month of mortgage-debt purchases, as part of its effort to stimulate the economy. Asset buying will continue “if the outlook for the labor market does not improve substantially,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington.

European Stocks Are Little Changed as Fed Decision Looms (Reuters)
European (SXXP) stocks closed little changed as investors waited for the Federal Reserve to announce its decisions on interest rates and economic stimulus, while American lawmakers continued talks on a new budget. PSA Peugeot Citroen surged 10 percent after a report that Algeria make acquire a stake in it. Wacker Chemie AG jumped 12 percent, the most since April 2009, after China announced a subsidy for solar projects. Barry Callebaut AG dropped 2.3 percent after saying it will buy a unit of Petra Foods Ltd. The Stoxx Europe 600 Index rose less than 0.1 percent to 280.64 in London. The equity benchmark has rallied 1.8 percent so far this month as U.S. President Barack Obama struck a conciliatory note on talks to prevent more than $600 billion of automatic tax increases and spending cuts from coming into effect next year.
“The Federal Reserve has a commitment, both to try to stabilize inflation and get unemployment back down,” Stephen King, chief economist at HSBC Holdings Plc in London, told Mark Barton on Bloomberg Television. “In the absence of anything else, more quantitative easing is the inevitable consequence we’ll see later today. It’s not so much the idea of getting roaring growth coming back, it’s more about preventing another dip in the economy.”

Emerging Stocks Gain as Swings Retreat on Fed Treasury Purchases (Reuters)
Emerging-market stocks climbed, with volatility in the benchmark index falling to a seven-year low, as the Federal Reserve said it will buy more bonds as part of measures to boost the world’s largest economy. GCL-Poly Energy Holdings Ltd. (3800) led gains on the MSCI Emerging Markets Index after China announced a second round of solar subsidies. Celltrion Inc. (068270), a biopharmaceutical company, gained the most in eight weeks in Seoul after saying it plans to pay stock dividends. E.ON Russia drove an advance in Moscow’s Micex Index (INDEXCF) on a report the power producer may pay its 2012 net income as dividends. Brazilian online retailer B2W Cia. Global do Varejo surged to a 17-month high in Sao Paulo.
The emerging-markets stock gauge rose for a sixth day, its longest winning streak in three months, adding 0.7 percent to an eight-month high of 1,041.37. Ten-day volatility for the gauge slid to 5.02, to the lowest level since September 2005. The Fed said today it will buy $45 billion of Treasury bonds starting in January, extending its asset-purchase program aimed at bolstering growth. Interest rates will stay low “at least as long” as the unemployment rate remains above 6.5 percent, the Federal Open Market Committee said in a statement. “I’m very positive because what we have witnessed in the last few years is an incredible build-up of money emanating from various central banks around the world,” Templeton Emerging Markets Group’s Mark Mobius, who oversees more than $40 billion, said in a phone interview from Nairobi today. “At the end of the day, it’s all about how much money is available in the system.”

Exporters Lift Nikkei 225 to 8-Month High as Yen Weakens (Reuters)
Japanese equities rose, with the Nikkei 225 (NKY) Stock Average extending an eight-month high, led by exporters after the yen fell to its weakest level since April. Honda Motor Co., which counts North America as its biggest market, led exporters higher. Panasonic Corp. (6752) advanced after its investment rating was raised by Barclays Plc. Mitsubishi UFJ Financial Group Inc. increased 1.9 percent on a report it will buy Bank of America Corp.’s stake in their Japanese private banking venture. The Nikkei 225 (NKY) gained 1.3 percent to 9,702.00 as of 9:27 a.m. in Tokyo, gaining the most in three weeks and heading for its highest close since April 5. The broader Topix index rose 1.1 percent to 799.72, with about six stocks rising for each that fell. All 33 industrial groups on the gauge rose.
“There’s been a big move in the currency,” said Stan Shamu, Melbourne-based strategist at IG Markets Ltd., a provider of trading services. “That’s the big positive for the Nikkei today and the exporters will be the ones that benefit.”

Korean Won Rises to 15-Month High, Bonds Fall on Fed Stimulus (Reuters)
South Korea’s won strengthened to a 15-month high after the Federal Reserve said it will expand asset purchases that boost the supply of dollars. Government bonds fell before a central bank policy announcement. The Fed said yesterday it will buy $45 billion a month of Treasury securities starting in January, in addition to $40 billion a month of existing mortgage-debt purchases. The Bank of Korea will hold its benchmark rate today at 2.75 percent after lowering borrowing costs twice this year, according to 14 out of 15 economists in a Bloomberg News survey. The decision is due at about 10 a.m. local time. Vice Finance Minister Shin Je Yoon said the impact on financial markets from yesterday’s rocket launch by North Korea was “limited” and “temporary.”
The won rose for a fifth day, the longest run of gains since October, and was 0.3 percent stronger at 1,071.23 per dollar as of 9:22 a.m. in Seoul, according to data compiled by Bloomberg. The currency touched 1,071.08 earlier, the strongest level since Sept. 8, 2011. One-month implied volatility, a measure of expected moves in exchange rates used to price options, slid 15 basis points, or 0.15 percentage point, to 4.80 percent. The Kospi index of shares gained 0.4 percent. “The Fed’s announcement is putting appreciation pressure on the won, and few are focused on the Bank of Korea’s policy decision today,” said Cho Young Bok, a Seoul-based currency dealer for Daegu Bank. Intervention by monetary authorities will be to “smooth” gains, rather than to reverse the appreciation trend, according to Cho.
South Korea is concerned about herd behavior in won trading and a worsening of the exchange-rate trend will be the most important factor in making any decision regarding a tightening of restrictions on capital flows, Vice Finance Minister Shin said Dec. 11. The yield on South Korea’s 2.75 percent bonds due September 2017 rose one basis point to 2.97 percent, Korea Exchange Inc. prices show. The one-year interest-rate swap was little changed at 2.78 percent.

Dollar Trades Near Week-Low as Fed Expands Bond Purchases (Reuters)
The dollar was 0.2 percent from its lowest level in a week versus the euro after the Federal Reserve said it will expand its asset purchases, a move that tends to debase the currency. The greenback fell against most of its 16 major counterparts yesterday as members of the Federal Open Market Committee said rates will stay low as long as unemployment remains above 6.5 percent and inflation is in check. The yen touched the weakest level since March versus the dollar before the Bank of Japan (8301)’s Tankan survey tomorrow and the nation’s general election on Dec. 16. “The Fed is clearly going to be expanding its balance sheet at sort of the maximum rate that anybody expected,” said Ray Attrill, the Sydney-based global co-head of currency strategy at National Australia Bank Ltd. “In that sense, it was right that the dollar was sold off a little bit.”
The dollar was at $1.3073 per euro at 9:38 a.m. in Tokyo from $1.3074 yesterday when it touched $1.3097, the weakest since Dec. 5. The yen fell 0.1 percent to 83.34 per dollar, the least since March 27. The euro traded at 108.94 yen from 108.86 in New York, where it climbed to 109.04, the most since April 4. The Fed said it will buy $45 billion a month of Treasury securities starting in January to spur the economy. The U.S. central bank plans to “maintain accommodation as long as needed to promote a stronger economic recovery in the context of price stability,” Chairman Ben S. Bernanke said yesterday at a press conference after he and other committee members met. The Bank of Japan’s quarterly Tankan survey tomorrow will probably show that sentiment among large manufacturers slid to minus 10 from minus 3 in the third quarter, according to the median estimate of economists in a Bloomberg News survey. That would be the lowest since the first quarter of 2010.
Opposition Liberal Democratic Party leader Shinzo Abe, whose party leads in opinion polls before the vote on Dec. 16, has called for a doubling of the central bank’s inflation goal to 2 percent and “unlimited” easing to revive growth. The BOJ is due to a hold a monetary policy meeting on Dec. 19-20.

Fed Officials Forecast Main Rate to Stay Near Zero Until 2015 (Reuters)
A majority of Federal Reserve officials don’t expect to raise the main interest rate until 2015, when they forecast the jobless rate will fall to between 6 percent and 6.6 percent. Federal Open Market Committee participants forecast today that gross domestic product will expand 2.3 percent to 3 percent next year, compared with 2.5 percent to 3 percent in September. Estimates for 2014 are from 3 percent to 3.5 percent, versus 3 percent to 3.8 percent in the previous projection, according to the central tendency forecasts, which exclude the three highest and three lowest of 19 projections. The FOMC earlier today voted to supplement their $40 billion a month of mortgage-bond purchases with $45 billion in monthly Treasury purchases once their Operation Twist program expires at the end of the month. The Fed said interest rates will stay low “at least as long” as the unemployment rate remains above 6.5 percent and if inflation “between one and two years ahead” is projected to be no more than 2.5 percent.
The jobless rate probably will average 7.4 percent to 7.7 percent in the final three months of next year, officials said, versus 7.6 percent to 7.9 percent in September. Five of 19 officials said the first interest-rate increase since 2006 would be warranted in 2014 or sooner, while 13 said it would occur in 2015. One called for an increase in 2016. Officials said prices as measured by the personal consumption expenditures price index may rise 1.3 percent to 2 percent next year, versus an increase of 1.6 percent to 2 percent in September. Central bankers have set a 2 percent target for inflation.

Fed Links Rates to Joblessness, Expands Bond Purchases (Reuters)
The Federal Reserve for the first time linked the outlook for its main interest rate to unemployment and inflation and said it will expand its asset purchase program by buying $45 billion a month of Treasury securities starting in January to spur the economy. “The conditions now prevailing in the job market represent an enormous waste of human and economic potential,” Fed Chairman Ben S. Bernanke said in a press conference in Washington today after a meeting of the Federal Open Market Committee. The Fed plans to “maintain accommodation as long as needed to promote a stronger economic recovery in the context of price stability,” he said. Rates will stay low “at least as long” as unemployment remains above 6.5 percent and if inflation is projected to be no more than 2.5 percent, the FOMC said in a statement. The thresholds replace the Fed’s earlier view that rates would stay near zero at least through the middle of 2015.
The move to economic thresholds represents another innovation by Bernanke, a former Princeton University professor and Great Depression expert who has stretched the bounds of monetary policy as he battled the recession and then sought to jolt the world’s biggest economy out of a subpar recovery. “The Fed has been very active since the crisis began, and they are feeling some time pressure because the longer Americans stay unemployed, the harder it is to incorporate them back into the labor force,” said Dana Saporta, a U.S. economist at Credit Suisse Group AG in New York.

American Companies Are Poised to Boost Capital Spending (Reuters)
American companies are poised to put idle cash to work as demand rebounds in 2013 after spending slumped amid the slowdown in China and Europe’s recession. Manufacturers project they will invest more next year than this year, according to the Institute for Supply Management’s semiannual survey released yesterday. Orders for capital equipment excluding defense and aircraft rose 2.9 percent in October, the biggest increase since February, Commerce Department data showed Nov. 27. Apple Inc. (AAPL), Starbucks Corp. (SBUX) and Chevron Corp. (CVX) are among those announcing additional expenditure plans as economies stabilize, banks ease lending rules and some industries approach full capacity. Companies, excluding financial institutions, are sitting on a record $1.74 trillion in liquid assets that could be put to use, especially if lawmakers agree to avert budget cuts and tax increases scheduled to take effect in January.
“Businesses are flush and highly competitive and this will shine through in a revival of investment spending by this time next year if Washington can get it roughly together,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. Spending on capital projects, those meant to increase productivity and capacity, will increase 7.6 percent next year, the biggest gain for any December survey going back at least seven years, according to the Tempe, Arizona-based ISM’s poll of purchasing managers. Last December, respondents forecast a 1.9 percent advance for 2012.

U.S. 5-30 Year Rate Gap Near Widest in 8 Weeks Before Sales Data (Reuters)
The extra yield that investors demand to hold 30-year Treasuries instead of five-year notes was near an eight-week high before data that may show U.S. retail sales and industrial production rose last month. The Federal Reserve announced plans yesterday to buy $45 billion of U.S. government debt a month from January and took the unprecedented step of linking stimulus measures to unemployment and inflation. The Treasury will auction $13 billion of 30-year debt today. “The lack of appetite for longer-maturity debt signals investor confidence in the U.S. economic outlook,” said Hideki Shibata, a senior strategist for rates and currencies at Tokai Tokyo Research Center Co. “Because of the Fed’s purchases, yields are unlikely to rise for maturities of up to around five years, so the yield curve will probably steepen.”
Thirty-year bond yields fell one basis point to 2.88 percent as of 9:37 a.m. in Tokyo, while five-year rates also slid one basis point to 0.65 percent. The spread between the two was at 2.23 percentage points after touching 2.26 yesterday, the widest since Oct. 17. The price of the 2.75 percent security due in November 2042 added 1/8, or $1.25 per $1,000 face amount, to 97 11/32. The benchmark 10-year yield declined one basis point to 1.69 percent. Japan’s 10-year government bond yield rose 1 1/2 basis points to 0.71 percent, according to Japan Bond Trading Co., the nation’s largest inter-dealer debt broker. It slid to 0.685 percent on Dec. 6, the lowest since June 2003.

Japan’s Abe Set to Inherit Deepest Manufacturing Gloom Since ‘10 (Reuters)
When Shinzo Abe was prime minister in 2007, optimism among Japanese manufacturers such as Sony Corp. (6758) was near a 16-year high. Now, as polls suggest Abe’s party will retake power in elections on Dec. 16, the Bank of Japan’s Tankan survey will probably show tomorrow that large manufacturers are the most pessimistic since the aftermath of the global recession. Sony hasn’t made a net profit in four years. Worsening sentiment may heighten pressure on Abe to deliver on promises for more fiscal and monetary stimulus even as he’s constrained by the world’s largest public debt. Honda Motor Co. (7267) and Nissan Motor Co. (7201) cut their profit forecasts by a fifth after Japan’s territorial dispute with China dragged down sales, while the government is poised to bail out chipmaker Renesas Electronics Corp. (6723)
“Abe’s intentions are very clear. He wants to weaken the yen, push up stock prices and improve sentiment,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. and a former central bank official. “It remains to be seen whether his policies will work.” Kanno expects the BOJ to add to monetary stimulus at its meeting next week. One of the central bank’s new tools is a planned program of unlimited lending to banks. Policy makers aim to limit restrictions on where money ultimately flows from that initiative, meaning cash could go to companies including hedge funds, people familiar with the central bank’s discussions said.

Bank of Japan’s Unlimited Loans Seen Open to Use by Hedge Funds (Reuters)
The Bank of Japan (8301) plans to avoid restricting where money ultimately flows from its program of unlimited lending to banks, meaning cash could go to companies including hedge funds, people familiar with the central bank’s discussions said. The BOJ doesn’t want to see credit extended to the public sector, such as through funding purchases of government securities, the people said. In October, the BOJ said inter-bank lending wouldn’t be available for use through the facility. Aside from the exceptions, the bank wants to avoid limits so the program is most effective, they said on condition of anonymity because the discussions are private. The board meets next week, and Governor Masaaki Shirakawa said he aimed to decide the details by year-end.
With a shrinking economy, declining population and entrenched deflation, Japan’s central bank has struggled to stoke private demand for credit, even with borrowing costs near zero. The program, outlined in October, follows measures from a venture-capital style lending facility to including real estate investment trusts in the BOJ’s main asset-purchase facility. “The impact of this program on Japan’s economy will be limited,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo and a former BOJ official. “We have to have companies take risks and that will take a visible recovery in the global economy.”

Japan Machine Orders Rise as Abe Vows Stimulus Ahead of Poll (Reuters)
Japan’s machinery orders rose for the first time in three months, a sign that companies may expect the world’s third largest economy to return to growth in 2013. Orders, an indicator of capital spending, climbed 2.6 percent in October from the previous month, the Cabinet Office said today in Tokyo. The median estimate of 25 economists surveyed by Bloomberg News was for a 3 percent increase. Large orders can cause volatile results. Rising orders and production in October suggest the economy is laying the foundations for recovery after contractions in the last two quarters. The yen has weakened around 3.9 percent against the dollar in the last month, while Shinzo Abe’s Liberal Democratic Party, leading in polls before elections on Dec. 16, has pledged fiscal stimulus to stoke growth.
“Companies are still cautious but a weaker yen and signs of recovery in the global economy are providing some relief,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. “Japan’s economy is going to have a moderate recovery.” The Nikkei 225 gained 0.6 percent to close in Tokyo at 9,581.46, the highest level since April 19. The yen was 0.3 percent lower at 82.75 per dollar as of 4:05 p.m.

Australian Bonds Drop on Fed Policy, Currency Near 3-Month High (Reuters)
Australia’s bonds fell, pushing yields on 10-year securities to a two-week high after the Federal Reserve said it will expand Treasury buying to stimulate the economy, crimping investor appetite for safer assets. The Australian dollar traded near the highest level in almost three months versus its U.S. peer which tends to be debased by expansionary monetary policy. The Federal Open Market Committee said rates will stay low as long as U.S. unemployment remains above 6.5 percent and inflation is in check. The Australian and New Zealand dollars were buoyed as global equities advanced. The currencies were also supported before a private report tomorrow forecast to show an expansion of Chinese manufacturing in December.
“The 10-year part of the curve probably reflects developments in U.S. 10-years after the Fed meeting,” said Gavin Stacey, chief interest-rate strategist in Sydney at Barclays Plc, referring to Australian bond yields. “The market is starting to reflect the global economic backdrop that is looking somewhat better than it had over recent times. We think yields in general across the curve are likely to grind higher.” The yield on 10-year Australian debt rose four basis points, or 0.04 percentage point to 3.26 percent as of 11:30 a.m. in Sydney. It earlier touched 3.29 percent, the highest since Nov. 26. The equivalent U.S. yield reached 1.71 percent yesterday, the highest since Nov. 7.
Australia’s dollar was at $1.0549 from $1.0555 yesterday, when it climbed as high as $1.0586, the strongest since Sept. 14. The Australian dollar dropped versus its trans-Tasman counterpart, reaching as low as NZ$1.2503, the weakest since Oct. 12. The New Zealand dollar traded at 84.34 U.S. cents from 84.36 yesterday when it reached 84.54, the most since Feb. 29.

Euro Rebuilding Vision Fades as Germany’s Vote Looms Over Crisis (Reuters)
Europe has lost the vision thing. The word “vision” appeared seven times in a June outline for transforming the euro zone into an American or Swiss-style economic union. It dropped out of an October follow-up and is absent from a final roadmap to be discussed at a summit in Brussels today. The scaled-back ambitions reflect ebbing pressure from financial markets, pre-election politics in Germany, a hardening of the ideological divide between northern and southern Europe, and the recognition that an overhaul of economic governance won’t work without a banking-system fix. “EU leaders might as well stay home,” Guy Verhofstadt, a former Belgian prime minister who is now in the European Parliament, said in Strasbourg, France, yesterday. “The political reality is that we are all waiting for the German elections before taking the crucial steps to end the crisis.”
The next stopgap is due this afternoon, when euro finance ministers are slated to approve a 34.4 billion-euro ($45 billion) loan disbursement to Greece. Still, creditor-country leaders such as Dutch Prime Minister Mark Rutte have said current aid pledges might not be enough to turn Greece around. So many EU crisis managers have descended on Brussels -- all 27 finance ministers to haggle over bank oversight yesterday, including 17 euro ministers to write the Greek check today, and all 27 leaders from 5 p.m. today and into tomorrow -- that the EU’s building custodians had to temporarily shutter the summit headquarters last night to get ready.

EU to Dilute Timeline for Euro-Area Overhaul, Draft Shows (Reuters)
European Union leaders are set to dilute the timeline for overhauling the euro zone, as German Chancellor Angela Merkel steps on the brakes. A draft statement for tomorrow’s EU summit drops a three- stage timetable that would commit euro leaders to consider as of 2014 paying into a budget to help absorb economic shocks. Such a budget could be weighed as the euro area “evolves toward deeper integration,” the document obtained by Bloomberg News said, without giving a deadline. Advances toward fiscal federalism “will take more time and will require in-depth consultations.” With Merkel running for a third term in late 2013, the Berlin government has chafed at offering further debt-crisis aid or venturing into a longer-term euro remake potentially bearing hidden costs for German taxpayers. Merkel’s objections had already led EU President Herman Van Rompuy to banish talk of moves toward common debt issuance from a roadmap for the euro’s future issued last week.
Pushback from Germany and northern creditor-country allies was reflected in today’s proposed summit statement, which abandoned the stage-by-stage timetable for deeper integration that featured in a Dec. 3 draft.

EU Lawmakers Seek Greek Swap Details After ECB Bars Files (Reuters)
Lawmakers in Italy and Germany are urging their governments to demand greater transparency from the European Central Bank after a court upheld its decision to keep documents secret that show what the central bank knew about Greece’s finances before its bailout. “Technocracies and kleptocracies cannot prevail over politics and democracy,” Senator Elio Lannutti, a member of the Italian Values party, said in a phone interview today. “The ECB is impermeable to transparency.” Lannutti, speaking in the lower house of parliament on Dec. 5, asked the government for clarity on how Greece masked its debt and how it plans to eliminate any doubt that the country’s financial situation may be worse that what it reported. He also sought an estimate of how much it may cost Italy to save Greece.
The European Union’s General Court in Luxembourg on Nov. 29 ruled that the central bank was right to withhold documents from 2010 because disclosure “would have undermined the protection of the public interest so far as concerns the economic policy of the European Union and Greece.” The case brought by Bloomberg News was the first legal challenge of the ECB to make public details of its decision-making process, leaving one of the region’s most powerful institutions free from public scrutiny.

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