There are three major taxes that threaten the unprotected capital of even the moderately well-off expatriate in France. Income tax, inheritance tax and wealth tax are all queuing up for a slice of your capital and, if you do not take steps to prevent it, they can make serious inroads into your net worth. Over the decades, the ever financially resourceful French have evolved and streamlined a product that is capable of both protecting accumulated wealth and promoting its development for the future enjoyment of the investor’s heirs. Effectively an investment within a life assurance wrapper, this product has been so successful that today there are over EUR 1.4 trillion invested in Assurance Vie policies. Over 22 million individuals or couples have either invested lump sums or save regularly using this instrument.

To understand the success of this product, we need to look no further than the tax concessions that it offers. Neither French capital gains tax nor income tax applies while the funds remain inside the policy and no withdrawals are made. Even where an amount is withdrawn, only the growth element is then subject to income tax. So, for example, if your portfolio of assets held within the policy has grown by 50% only this percentage of the withdrawal would be taxable; the remaining 50% would be tax-free. Income tax on the gain is charged on a sliding scale, depending on how long the policy has been in force. Nominally the tax rate is 35% for a policy less than 4 years old, 15% for policies between 4 and 8 years old, and 7.5% for all policies over 8 years old. While this may seem punitive for the first four years, you can elect to have the gain added to your taxable income and declared via your annual tax return, making it subject to tax at your prevailing rate. This is obviously advantageous if you have a relatively low income.

As an extra incentive to let your funds grow for at least eight years, there is an annual tax-free allowance of EUR 4,600 (single person) or EUR 9,200 (married couple). This allowance relates strictly to capital gain within the policy so, depending on the growth enjoyed during the investment period, relatively large withdrawals can be made completely free of income tax. A quirk of the French tax system can work greatly to the investor’s advantage with an Assurance Vie policy. The eight year qualifying period for the most beneficial tax regime is governed by what is known as the tax clock. This starts ticking at the instigation of the policy, even if the initial investment is a relatively small amount. It may not be wise to test this system to its limits, but if say EUR 100,000 were invested on day one, and a further EUR 200,000 a year later, the entire fund would still be subject to the lowest tax rates eight years later.

The benefits of Assurance Vie policies are not just restricted to income tax or Capital Gains Tax. In France, succession tax is directly comparable to British inheritance tax, but it works in a slightly different way. In the UK, inheritance tax is levied on the estate of the deceased whereas, in France, succession tax is levied on the beneficiary(ies) of the estate where any tax due is then deducted by the notaire from the proceeds of the will. But with an Assurance Vie policy, the proceeds largely override succession law/tax, which can include overriding children from a previous marriage in favour of the existing spouse if the right steps are taken. Any number of beneficiaries may receive up to EUR 152,500 completely free of tax and pay only 20% on any further amounts received. While changes to the tax regime regarding spouses and children have reduced the impact of this, it still has its advantages for them. And there are also still huge tax savings to be made when bequeathing legacies to unrelated beneficiaries such as friends or step-children, who would normally pay tax at 60%. There are restrictions to this tax largesse however; the policy must be set up and funded before the policyholder reaches the age of 70. After this age, the tax advantage is restricted to a total of EUR 30,500 for all beneficiaries combined.

With regards to wealth tax, generally speaking, the value of an Assurance Vie policy is taken into account in wealth tax calculations, but there are circumstances where Assurance Vie can help mitigate wealth tax liability. Some Assurance Vie providers are domiciled outside of France while still offering fully compliant policies, so if you have just moved to France from the UK or are planning to in the future, you can use one of these products to benefi t from the recent amendment in the double taxation treaty between the UK and France. This is because the new version of the treaty allows all assets held outside of France to be exempt from liability to French Wealth for the first 5 years of your residency in France. Another advantage with the offshore providers is that a few of them are also able to offer French mortgages against the policies, which can also further assist with reducing your wealth tax liability.

With regards to how the capital invested inside your policy grows, most Assurance Vie providers have a very diverse portfolio of options available, which will include investments like equities, commodities, ETFs, managed fund, structured products and other fixed interest products. In most cases, there is a very large range of risk on offer, so that both the cautious and the highly adventurous can find a suitable solution, and now there are even funds that will guarantee to preserve and protect a minimum of 80% of your initial capital and accrued gain. Another investment that is favoured by French providers is Fonds en Euro, which is low-risk and predominantly made up from European Government bonds. However, due to the current Euro zone crisis and the fact that they are the only investment within an Assurance Vie where social charges are deducted annually instead of on withdrawal, the potential returns can be less attractive when compared with the other options mentioned.

Everyone is counting on this output: Greece will leave the Euro Zone. And the fact that 16 Spanish banks were downgraded by the rating agencies, can announce only turmoil.

Before the G8 summit there are calculations about the possibility of Greece to abandon the Euro currency. At the end of the first  quarter in which it was registered the weakest growth in EU history, the economic analysts anticipate what will happen after Greece leaving the Euro zone.

“We’re in the middle of this debate about growth versus austerity. Growth will not come out of the muzzle of a fiscal gun. On balance and in aggregate, we will probably make matters worse if we stop fiscal consolidation… We need to break out of the conundrums of these policy-design failures. We need to break the link between the banks and the sovereigns”, said Thomas Vieser, a EU top official.

“We believe that Grexit, in isolation, would be manageable for European banks. Grexit, with 50pc to 75pc probability, could impact exposures to Greece of up to around €410bn. However, we estimate most of these exposures (up to around €360bn or 87pc) belong to the official sector. We calculate the remainder is attributable to the private sector: up to €15bn for CASA, SocGen, Bank of Cyprus and Cyprus Popular which have subsidiary or branch exposures to Greece; up to c.€5bn for Greek banks; up to around €20bn to other European banks; and up to €15bn to other investors”, says an analyst from Citibank.

On the other hand, radical leftist leader in Greece, Alexis Tsipras, said that if the country will not receive financial aid from the euro zone countries, then Greece would no longer pay it’s debts.

“Our first choice is to convince our European partners that, in their own interest, financing must not be stopped”, said Tsirapas in an interview for Wall Street Journal.

Tsirapas’s party is ranked with the first chance in the electionsto be held next month. Today, Fitch downgraded Greece’s credit rating to CC from B-. And if growth continues to underperform expectations, Greece’s debt won’t be much lower in 2020 than it is today.

Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.5 million people,[1] Berlin is Germany’s largest city and is the second most populous city proper and the eighth most populous urban area in the European Union. Located in northeastern Germany, it is the center of the Berlin-Brandenburg Metropolitan Region, which has 4.4 million residents from over 190 nations. Located in the European Plains, Berlin is influenced by a temperate seasonal climate. Around one third of the city’s area is composed of forests, parks, gardens, rivers and lakes. (source Wikipedia)

If you want to move and live in Berlin, depending on what time-scale you have in mind for Berlin, there are several options that may suit.

The standard long-term agreement is great if you are moving permanently, but it may take several weeks to find the right place and sign. Until then, or if your intended stay is from days to a month or two, consider renting a short-stay apartment, so that you get the feel for a neighbourhood and save money on eating out.

Short-term rentals work out pretty well if you are in Berlin for business or if you want a private and fully equipped apartment while you look for your permanent apartment deal. It’s a failsafe means of feeling at home while allowing you to work, explore the areas and of course, flat-hunt.

If you are looking for temporary apartment in Berlin, for example, several months up to a year, you may be able to find a sublet, called Untermiete or Zwischenmiete, which is a contract between tenant and tenant, or a “nachmeiter”, meaning taking over someone’s lease. These are quite common in Berlin as the upwardly mobile locals are prone take off and go travelling for several months.

Another option for starting out in Berlin is to share with others. You’ll see rooms offered as WG’s or Wohngemeinschaften (Note that WG-Zimmer are usually unfurnished).  Although more common for young people, it is also possible to find a shared apartment with middle-aged groups.  This is good for meeting locals, but do keep in mind that since Berlin rents are so cheap, even a very big room being offered for EUR 500 overpriced.

Choosing a neighbourhood

Berlin is completely different when compared to other European cities, as each of its central areas area spread out and always well-connected with U-Bahn, S-Bahn or tram. Therefore, when conducting your search, you don’t have to play it safe and only look “central”. Read up on the neighbourhoods and work out your needs.  Do you like being in the commercial district or do you prefer quiet? Does it need to be close to your place of work?

Choosing an apartment

You’ll get the immediate feeling of more-space-for-your-money when it comes to Berlin. Many of the apartments are huge, converted factory spaces, but they don’t suit everyone.  So make sure you’ve got your checklist straight when it comes to apartment criteria. Many of the apartments advertise how many zimmer (rooms) they have; this usually excludes the kitchen and bathroom areas. If you don’t like to cook, maybe a kitchenette is sufficient. You’ll see in the housing terms at the bottom how to decipher this from the apartment’s advert. Will you need a spare room for visits by family and friends? Would you prefer more space or a cosier home? Most of the huge loft rentals can be costly to heat during cold Berlin winters.

Where to find Berlin apartment listings
Newspaper listings are agreed as the best place to look, if you want to go through an owner. Try the Saturday Berliner Zeitung (numerous pages of adverts, sorted by neighbourhood), the weekend edition of the Berliner Morgenpost with its huge immobilien section, or magazines such as Zitty and Tip. The best time to call owners is in the morning, for a better viewing time and higher chance of success if you find the apartment you like.

Contracts and renting

German landlords are renowned for following up every detail of the contract, but if in doubt with regards to some of the clauses, you can get help in understanding aspects of the lease.

Ask a German colleague or visit the local tenants association, the Mieterschutz-Verein.  You can find your nearest one through the Deutscher Mieterbund.  If you become a member you will receive legal cover in case of future problems with the rental agreement.

As is usual in most countries, you will be required to pay a deposit (Kaution) which is refundable on your departure. Normally you will be asked for one or two months deposit (three months is the legal maximum) plus VAT.

Interestingly, the deposit also accrues interest and in this context, a good tip is to put into a joint account between yourself and the landlord, to prevent the landlord from withholding the deposit. However if there are damages, the owner is allowed claim the amount for repairs.

So do your research, take your time with the search and be patient with the locals; the best Berlin rental apartment deal always comes to those who wait.

German housing terms and abbreviations

To help you in your search, here are the most typical abbreviated terms you will see:

Abstand: (Semi-furnished only)
DG: Dachgeschoss (loft apartment)
EG: Erdgeschoss (ground floor)
VH: Vorderhaus (front of building)
HH: Hinterhaus (rear of building)
Qm: Quadratmeter (size in square metres)
ZH: Zentralheizung (central heating)
NR: Nichtraucher (no smoking)
WG: Wohngemeinschaft (shared apartment)
WBS: Wohnberechtigungsschein (subsidised housing)
2 Zi.-Whg: (apartment with 2 rooms)
2 ZKDB: (apartment with 2 rooms and kitchen, hallway, bathroom)
Zi: Zimmer (rooms)
Wfl.:Wohnfläche = living area
EBK: Einbauküche (built-in kitchen)
KN: (kitchenette)
KM: Kaltmiete (cold rent)
WM: Warmmiete (warm rent; the cold rent plus bills)
NMM: Nettomonatsmiete (net rent, excluding bills)
zzgl. NK: (plus extra charges such as heating, electricity, etc.)
kalt: (heating extra)
K: Kaution (deposit)
Nachmieter: (taking over an existing lease)
MVZ: Monatliche Vorauszahlung (rent in advance)
Prov.:Provision (commission)

The European Roma Rights Centre (ERRC) is recruiting for posts including lawyers, legal fellows, interns and a researcher. The positions are all based in Budapest, Hungary.

The ERRC is a public interest law organisation that defends the human rights of Roma throughout Europe and serves as a legal resource centre for advocates working in this field. The ERRC pursues its objectives by engaging in legal representation, research, monitoring and reporting, human rights education and international advocacy.

1) Staff Lawyers
The European Roma Rights Centre (ERRC) seeks experienced lawyers to litigate Roma rights, ethnic/race discrimination and related cases in domestic, European and international tribunals. The ERRC’s core legal work is to engage in impact litigation on behalf of Roma before both domestic and international courts.

Based in Budapest, the lawyers will work with the legal team to develop and implement legal strategy, handle selected cases, draft amicus curiae briefs and legal submissions to domestic and international dispute resolution fora, and will work with lawyers, judges, human rights organisations and other relevant institutions. The staff lawyers may also participate in or coordinate legislative and policy review and drafting, advocacy and lobbying, as well as training and public education on legal issues.  Staff lawyers will also provide appropriate substantive input into research reports, donor reports and funding proposals. See the full specification on the
ERRC website.
http://www.errc.org/join-us?utm_medium=email&utm_campaign=ERRC+Seeks+Staff+and+Interns&utm_source=YMLP&utm_term=

How to apply: Applicants should submit a cover letter, curriculum vitae, salary history, together with an unedited English-language
legal writing sample and a list of three referees by email to: hajnalka.nemeth@errc.org. Please mark the subject line: Name Surname –
lawyer call. Deadline: 16 May 2012.

2) Legal Fellows
The European Roma Rights Centre (ERRC) invites applications for its legal fellowship programme. Legal fellows will support ERRC lawyers for six to twelve months in litigating Roma rights, ethnic/race discrimination and related cases in domestic, European and international tribunals. The ERRC is a public interest law organisation that defends the human rights of Roma throughout Europe and serves as a legal resource centre for advocates working in this field. The ERRC pursues its objectives by engaging in legal representation, research, monitoring and reporting, human rights education and international advocacy. The ERRC’s core legal work is to engage in impact litigation on behalf of Roma before both domestic and international courts.See the full specification on the ERRC website.
http://www.errc.org/join-us?utm_medium=email&utm_campaign=ERRC+Seeks+Staff+and+Interns&utm_source=YMLP&utm_term=

How to apply: Applicants should submit a cover letter, curriculum vitae, salary history, together with an unedited English-language legal writing sample and a list of three referees by email to: hajnalka.nemeth@errc.org Please mark the subject line: Name Surname –
legal fellows. Deadline: 16 May 2012.

3) Researcher
The researcher is responsible for the development and implementation of research and advocacy work in relation to ERRC strategic priorities, by providing human rights research knowledge and know-how, strong analysis and effective communication skills. The post involves implementing research and advocacy components of the ERRC strategy and work plan in consultation with the Coordinator of Research and Advocacy, in cooperation with country team members and in accordance with the country focus of this position. See the full specification on the ERRC website.
http://www.errc.org/join-us?utm_medium=email&utm_campaign=ERRC+Seeks+Staff+and+Interns&utm_source=YMLP&utm_term=

How to apply: Qualified candidates should send the following application materials; persons submitting incomplete application packages will not be considered for the position:
1. Maximum 500 word letter of interest;
2. Detailed CV in English;
3. Contact details for a present or former employer (reference should
be from immediate supervisor) and one other relevant referee; and
4. An unedited English-language writing sample by the applicant (preferably human rights focused).
Submit to: Aniko Orsos – ERRC Researcher Search
aniko.orsos@errc.org
Fax: +36.1.413.2201
Deadline: 16:00 on 4 June 2012.

4) Interns
The ERRC offers interns a dynamic, fast-paced, international human rights environment, based in Budapest, Hungary. Romani and non-Romani interns are chosen for this programme through a competitive bi-annual selection process. The ERRC is currently accepting applications from persons wishing to intern at the ERRC for three to six months between September 2012 and February 2013. In line with its Equal Opportunity Policy, ERRC offers a limited number of stipends for full-time internships to Romani individuals only.The ERRC encourages applications representing all segments of society (women, LGBT, disabled people, etc). Romani individuals are strongly encouraged to apply for an internship stipend. For stipend recipients, the programme includes an in-country follow-up component. The ERRC and selected interns will work together to implement jointly community-based human rights initiatives (small research, advocacy or other related projects) in a Romani community as follow up to the time spent at the ERRC office. This component is optional but applicants expressing interest in the follow-up will be given priority in the programme. See the full specification on the ERRC website.
http://www.errc.org/article/errc-seeks-staff-lawyers-and-legal-fellows/3987?utm_medium=email&utm_campaign=ERRC+Seeks+Staff+and+Interns&utm_source=YMLP&utm_term=

How to apply: Interested persons should submit all of the following materials to be considered for placement:
1. A fully completed application form;
2. A brief, unedited writing sample; preferably human rights focused (maximum 2 A4 pages).
Only complete application packages will be considered; please submit both documents together. Completed application packages should be submitted to Ms Dora Eke:
Subject heading: ERRC Intern Search
Email:dora.eke@errc.org
Fax: + 36.1.413.2201
Deadline: 18 June at midnight CET time.

(cross posting Romanian Roma)

A new political leader appears on the horizon in Germany. Hannelore Kraft is the social-democratic version of Angela Merkel. Governor Hannelore Kraft, top candidate of the Social Democratic Party SPD for the North Rhine-Westphalia Federal Elections states, gives the thumbs up on the last day of the election campaign rally in Muelheim, Germany.

This is a first sign of the German people that got tired of austerity. Taking the French veil, the 13 million German voters of North Westphalia gave a vote of censure for the Christian Democrats Party, led by Angela Merkel. Ther elections results in this area, the largest in Germany, often have launched the trend for the general election.

Most commentators dismiss media speculation that the relatively inexperienced Kraft could challenge Merkel in next year’s federal vote, although the SPD, Germany’s main opposition party, is widely seen as lacking an obvious candidate.

Who’s Hannelore Kraft?
Hannelore Kraft, born 12 June 1961, is a German politician. She is the leader of the Social Democratic Party in North Rhine-Westphalia and the current Minister-President of North Rhine-Westphalia. Kraft is the first woman to fill this post since it was created in 1946. She has served on the SPD’s federal executive since November 2009, and is one of the four federal deputy chairmen. Between 1 November 2010 and 31 October 2011 she was the President of the German Bundesrat after Jens Böhrnsen. She was the first woman to hold the office.

She became famous not because of her political qualities. In July 2010, at the end of a musical concert, there was a general clutter and 21 people died. At the funerals, Hannelore has impressed everyone with her speech of a worried mother, because  she could not find her son, who was also at the concert.

On 13 November 2009, Kraft was elected as one of the four vice chairmen of the federal SPD under chairman Sigmar Gabriel, receiving the highest overall vote.

A party congress in February 2010 affirmed that she was the SPD’s candidate for Minister-President at the May 2010 state election.

The state election on 9 May 2010 resulted in a near tie with the governing CDU at 67 seats, and with Kraft’s preferred red-green coalition one seat short of an overall majority. After many parallel negotiations and various coalitions, Kraft was elected Minister-President of North Rhine-Westphalia on 14 July 2010 on the second ballot with a sufficient plurality of votes, coming from the Social Democrats and Alliance 90/The Greens, while the Left Party abstained. Kraft formed a minority government with ministers of Social Democrats and Greens.

In October 2010, Kraft was elected President of the Bundesrat, according to the customary rotation of the chairmanship between the Bundesländer. She assumed office on 1 November 2010, becoming the first female office holder, remaining in office until 31 October 2011.

“We have to consolidate the budget,” Ms. Kraft told an audience at a campaign stop recently, after a member of the audience asked about state help with affordable student housing. “We cannot give out the same money twice.”

That is exactly what her critics accuse her of doing, including by abolishing higher-education fees and adding both teachers and police officers during her term at the helm of the state government. Last year the state had a $3.9 billion shortfall. When Ms. Kraft proposed a budget with a gap of $4.7 billion or more this year, her unstable government collapsed.

A qualified economist and business consultant, Kraft’s political priorities – a minimum wage, education reform and boosting NRW’s business appeal – are linked to the economy.

Yet her biggest vulnerability is fiscal management and that could yet dent any hopes of higher office.

Working abroad is not just knowing how to complete your resume. First of all, you should inform yourself about labor laws, to know where to look for work and what documents you should fill for hiring. You must be aware of your rights and obligations as employee.

Read more:
Renting in France: how to avoid problems with your landlords

Work permits in France

The arab immigrants see Europe as a land of choice. Europe, unlike the Arab countries, seems a place of hope and opportunity, a place where young arabs, especially, can escape from the life style and the strict values ​​imposed by their system and their laws. And the gateway for those immigrants, especially those coming illegally, it’s called Greece.

Golden Dawn. That’s the name of the extremist greek movement, who surprised everyone last week, when its representatives have obtained seats in the greek Parliament. Extremism in Greece begins to grow. Is favored not only by the poor economic conditions, but also because the waves of the immigrants arriving in Greece, especially from the Arab countries, from Turkey.

Greece and Turkey are separated by a 126 miles border. Trough here, 100,000 immigrants came this year in Greece wanting to seek a new path in life. An european palth. It is expected that, here, life will be better than in countries from they are leaving.

But when they see that the economic situation in Greece is poor, many of them go to other EU countries. They take advantage of the fact that here, in Greece, it’s much easier to get false work permits or visas for the EU countries, than if they immigrate directly to the Netherlands, for example.

So Greece became a bridge for immigrants from the Arab countries and there is a big problem with the  illegal ones.

On the one hand, the European Commission started to put more pressure on Greece to stop this phenomenon. On the other hand, Greece really need to stop this phenomenon, because the far right has gained increasingly more power and the Greek nationalists and extremists begin to assert themselves becoming stronger.

In a country with a high unemployment rate, somewhere around 19% and a poor economic situation and with a population that  express it’s requirements violently, Golden Dawn movement found fertile ground to grow.

The European Commission allocated €304 million ($393 million) to Greece from 2007 through this year for improving the nation’s migration management. But administrative “red tape” in Greece has hindered absorption of much of that funding, an EC spokesman said.

The Greek government is trying to implement a series of measures. One of them is strengthening border with Turkey. The authorities will build a fence 6.5 miles long, but that’s too little to stop the ilegal immigration from the Arab countries.

The Roma Access Program is a 9-month preparatory program for promising Roma students from Central and Eastern Europe, designed to prepare promising young Roma for international post-graduate studies in English language programs.

Full scholarships will be awarded, covering tuition, housing, travel, and a living stipend. The application deadline is 30th May 2012. Roma Access Program

The full-time, 9-month course will start at the end of August 2012 and last until the end of May 2013. It will be a combination of:

• Classes in the student’s chosen field of study – including Gender Studies, International Relations and European Studies, Law/Human Rights, Political Science, Public Policy, or Sociology (additional disciplines may be offered)
• English language training
• Academic writing
• Participation in CEU Master’s level classe
• Preparing students to serve as role models in their communities and beyond
• Working to build strong Roma youth leadership in terms of skills, knowledge, pride and commitment for the betterment of Roma communities.

Who can apply? Young Roma from Central and Eastern Europe (Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Macedonia, Hungary, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Kosovo, Slovakia, Slovenia, Turkey, and Ukraine) who have:

• A university/college degree in any field (preferably in the Social Sciences or the Humanities) by July 2012
• A strong interest in post-graduate university education
• At least pre-intermediate English language skills
• A desire to study in a multicultural and international environment
• An ambition to become a role model in their communities and beyond

Contact:
Georgeta Munteanu, Program Coordinator
Roma Access Program
Special Projects Office, Special and Extension Programs, Central European University, Nador u. 13, 6th floor, #621, H-1051 Budapest, Hungary
MunteanuG@ceu.hu
+36 1 327 3000, ext. 2585
Mailing list: http://groups.google.com/group/roma-access-program
Facebook page: CEU Roma Access Program

The London Whale has wrecked! No, it has nothing to do with reminiscent romance of the movie Free Willy. In this case, a rescue operation would be a new maneuver to support suicides  on Wall Street. Now, it’s a big loss: $2bn.

J.P. Morgan Chase has bet a lot of money in transactions with a high degree of risk. A trader at the company, called Bruno Michel Iksil, bet in April in many so-called credit-default swaps, influencing the evolution of prices of several shares on the stock market. J.P. Morgan said at that time that his unit is meant to ‘hedge structural risks.’ On April 10, the trader had stopped making trades . The derivatives made ​​by Michel Iksil worth 100 billion dollars!

Now the company is facing with six weeks losses amounting to 2 billion dollars and things can get worse and worse.

“These were egregious mistakes,” said Chief Executive Jamie Dimon, who is considered one of the world’s savviest bankers. “We have egg on our face, and we deserve any criticism we get.”

The blowup at the USA’s largest bank came amid a heated debate in Congress over how much regulation is needed to rein in the risk-taking that caused the near-meltdown of the financial system in 2008.

The crux of the argument had been whether the so-called Volcker rule, which limits how much federally insured banks can risk in trading for their own accounts, had gone too far.

The losses could potentially expose bank employees to so-called clawback policies that permit the recovery of compensation in the event of a financial restatement. Banks like J.P. Morgan have adopted such policies, which also are required under the Dodd-Frank financial overhaul law.

“These were egregious mistakes,” said Chief Executive Jamie Dimon, who is considered one of the world’s savviest bankers. “We have egg on our face, and we deserve any criticism we get.”

JP Morgan drops 7% in heavy after-hours volum. U.S. stock index futures fell sharply on Thursday evening as JPMorgan Chase & Co stunned investors with news that its chief investment office had incurred “significant mark-to-market losses” that it said could “easily get worse.” S&P 500 futures fell 11.6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Nasdaq 100 futures fell 16.75 points.

The blowup at the USA’s largest bank came amid a heated debate in Congress over how much regulation is needed to rein in the risk-taking that caused the near-meltdown of the financial system in 2008.

The crux of the argument had been whether the so-called Volcker rule, which limits how much federally insured banks can risk in trading for their own accounts, had gone too far.

The losses could potentially expose bank employees to so-called clawback policies that permit the recovery of compensation in the event of a financial restatement. Banks like J.P. Morgan have adopted such policies, which also are required under the Dodd-Frank financial overhaul law.

“JP Morgan is a huge bank and could absorb this loss. But many questions arise because many banks are vulnerable when it comes to such operations, but the bank regulators should intervene, ” said one analyst quoted by Bloomberg.

U.S. lawmakers and interest groups favoring tighter restrictions on proprietary trading said JPMorgan Chase & Co. (JPM) (JPM)’s $2 billion loss on synthetic credit securities bolsters their case. Senator Carl Levin, the co-author of the so-called Volcker rule and chairman of the Permanent Subcommittee on Investigations, said the New York-based bank’s disclosure yesterday served as a “stark reminder” to regulators drafting the proprietary-trading ban required by the 2010 Dodd-Frank Act.

The Volcker Rule is a specific section of the Dodd–Frank Wall Street Reform and Consumer Protection Act originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers. Volcker argued that such speculative activity played a key role in the financial crisis of 2007–2010. The rule is often referred to as a ban on proprietary trading by commercial banks, whereby deposits are used to trade on the bank’s personal accounts, although a number of exceptions to this ban were included in the Dodd-Frank law. The rule’s provisions are scheduled to be implemented as a part of Dodd-Frank on July 21, 2012, with preceding ramifications.

It all started amid the sterile discussions on Greece’s debt. The Greek government has not reached an agreement with private investors on that haircut of 50%. Thus, the country could go bankrupt in March, because it depends very much of a huge loan from the IMF. Loan will be granted only if Greece will get a deal with its investors. In this point, none of the main actors – Mario Monti, Angela Merkel, Sarkozy or private investors – do not want a bankruptcy of Greece.

France downgrading effects will be felt first in the political sector. Nicolas Sarkozy is with four months before the presidential elections. Sensing the threat of the downgrading, Sarkozy filed a very populist theme with strong implications in the economic area. He is the strongest supporter of the Tobin tax. Economic, France will suffer enormously after the downgrading. Borrowing costs on financial markets will increase and the French banks that hold Spanish, Greek and Italian bonds will be nervous about the possibility that these debts could not paid. France is the second country, after Germany, which has huge bonds of eurozone countries that are struggling to survive.

Amid these problems, investors will demand more compensation and to own bonds are now increasingly riskier bonds see Spain, Italy and Portugal.

Italy is the third EU’s economy. The European Central Bank today made a foray back on financial markets and bought Italian bonds. Whose interest began to grow and reach 7%. Spain and Italy will have difficulties to borrow on the financial markets. In order to curb financial deficits, the two countries will have to implement new and new austerity measures. That means new layoffs and the increasing of the unemployment rate, wich is huge.

Euro falls sharply. It is a good news for exporters, but only for now, because it will not boost the eurozone economy. All countries are implementing austerity measures, the debt increase and the main engine of the European Union, namely Germany, is begining to “cough”. The German exports will suffer from this situation and what is really worrying is that Germany could enter in the downgrade dance, especially because in the first months of the year it was announced that Germany is likely to enter in a mild recession for a couple of months.

The European Financial Stability Fund must struggle to raise money on financial markets. Downgrading France, the second contributor to the Fund, resulted in a reduction of resources from 451 billion euros to 271 billion euros. The Fund has already provided 293 billion Portugal, Greece and Ireland.

Starting today, the next six months will be crucial for the euro area. If Greece does not reach an agreement with its investors and will not get loan from the IMF and at the summit in Brussels, which will take place in two weeks, the franco-german coalition will not reach a consensus agreement concerning the implementation of controling measures of the deficits and will not implement common economic policies, especially in the eurozone, the scenario is far too grim to be described.