The government will review the tax on tobacco to reduce the effect "multiplier" of the social VAT on tobacco prices and avoid too large an increase of the cigarette package, officials said Saturday at Bercy.

The Ministry of Economy "is considering reducing the multiplier effect of the VAT hike on tobacco through a lowering of excise (tax collected by the State, Ed) on tobacco", it was indicated to the Department, confirming a report published on the website of Les Echos.

Besides the increase of 1.6 point VAT on 1 October, a 6% increase in tobacco prices in 2012. Due to the complex mechanism of pricing of cigarettes, the combination of these two boxes (one on taxation, the other on price, Ed) mechanically lead to an increase greater than 10% of the package.

At the announcement of the introduction of VAT social, tobacconists and manufacturers have alerted the authorities about the effects of this increase that threatens their marges.Bercy will reduce excises, to 63.28% as against 64, 25%, erasing "to nearly 90%" the VAT increase, according to Les Echos.

+ 2% from 1 October (6%)

"There will end up with a slight overall increase in taxes on cigarettes (0.13 points), corresponding more or less to the impact of the VAT hike in other sectors", according to the newspaper.

These figures have not been confirmed by Bercy which emphasizes that "the tobacco industry will contribute as much as other sectors". Les Echos report that "the margins of manufacturers fall moderately", without elaborating.

Ultimately, the VAT hike is expected to increase prices by 1.5% to 2% effective October 1, understands the quotidien.A this increase must be added the 6% pay increase for the fall at a date not yet known.

Around 12:20, the CAC 40 index advanced 3.6% (102 points) to 2959 points, rising to 3,000 points after falling 4.67% last week.

The London Stock Exchange gained 2.04%, 3.10% that of Frankfurt and Milan up 3.08%.

Germany has registered a growth of 0.5% of its Gross Domestic Product (GDP) in the third quarter, a better performance than its French neighbor, which attests to the strength of the first European economy to the air hole waiting . Without revive its vitality from the beginning of the year (+1.3% in the first quarter), growth resumed during the summer months, depending on the initial estimate at constant prices and seasonally adjusted, published Tuesday by the Federal Statistical Office Destatis.

"We continue to be incurred by our original goal of an operating profit of four billion euros for the group, but given the market environment, we will not be able to reach next year" , said Friday Martin Blessing, CEO of Commerzbank.

In early trade on the Frankfurt Stock Exchange, the title of the bank fell by 5.53% to 1.656 euro while the index grouping the European banking stocks gained 0.61%.

Having already reduced its exposure to the most indebted countries in the euro area over 20% to 13 billion euros, a discount of 52% spent on the Greek securities, Commerzbank said it would continue to reduce its portfolios of sovereign debt issued by Portugal, Italy, Spain, Ireland and Greece.

The bank charged an operating loss of 855 million euros in the third quarter against a profit of 116 million a year ago and a Reuters consensus of 683 million euros.

The profits generated by the core business of Commerzbank – loans to medium-sized German companies – continued to be substantial, said the bank to 344 million euros.

"There are no ongoing negotiations with China" in Chinese investment in the European Financial Stability Fund (EFSF), said Friday in Beijing's director, Klaus Regling, citing only "regular consultation". Mr. Regling is visiting China in the wake of the announcement of an agreement anti-crisis in Europe which includes strengthening the capacity for action of the EFSF to help indebted countries.His visit was seen as a sign that the EFSF would seek financial support from China, the second global economy has a huge cushion of reserves and already has European debt.

But "there are no ongoing negotiations with China," only "regular consultations at an early stage," said Regling warning: "There will be no agreement today" . "I had contacts with the Chinese authorities, (which) are regular buyers of bonds EFSF" Regling said at a news conference, adding that Asia had acquired 40% of the bonds Fund this year. "China will find it a worthwhile investment," said the boss of the EFSF. Since the beginning of the year, Japan has in turn invested 2.68 billion euros, or 20% of total loans issued by the EFSF.

"Until now the only way we asked investors to participate (the fund) was to buy bonds. There was no other instrument," said Mr Regling. But "now we are developing new tools and we will see who will participate," he said without elaborating. "Foreign exchange reserves of China are increasing every month, so there is a need for investment," said Mr. Regling about these reserves of 3,200 billion.

The Chinese "are interested in attractive and safe investment," he noted, before talks at the Ministry of Finance and the Central Bank. The euro area has decided at its summit in Brussels crisis Wednesday and Thursday to multiply the firepower of EFSF for countries in difficulty, Italy or Spain. Its response capacity would increase to 1,000 billion euros.

The commitments offered by Italy Wednesday to clean up its finances were judged "satisfactory" with its partners in the euro area, provided they are implemented, but this success was overshadowed by a controversy with Germany. "The EU summit welcomed the commitment of Italy. These ambitious measures to liberalize the economy must be applied," said the President of the European Union Herman Van Rompuy, after a summit of the area euro in Brussels.

"Yes we are happy," confirmed the Head of French State Nicolas Sarkozy during his press conference. "But we expect their achievement," he warned.Silvio Berlusconi has assured of his intention to run. "If we do not respect our commitments, we will no longer credible," he admitted leaving the summit. He promised to present a timetable for the adoption of the measures announced by the Italian Parliament. The head of the Italian government has incurred the wrath of Chancellor Angela Merkel ensuring obtaining apologized for his behavior at the EU summit last Sunday, what curtly denied the spokesman of the Chancellor.

"There was no excuse because there were no grounds to apologize," said Steffen Seibert on his twitter account. When asked about confidence in Silvio Berlusconi, Angela Merkel and Nicolas Sarkorzy had exchanged amused smiles before answering. The film of this scene of 19 seconds was repeatedly broadcast in the media and Italian Silvio Berlusconi had felt humiliated.The conclusions of the detail a series of measures to be implemented in two years to reduce the huge debt of 1,900 billion euros, or 120% of GDP currently to an amount representing 113% of GDP in 2014.

The Italian leader is now under surveillance by the European Union. The Commission is invited "to monitor in detail the measures and monitor their implementation," said Merkel, adding that Rome had committed to provide "all information in detail." A balanced budget will be achieved in 2013 due to austerity measures totaling 60 billion euros by 2014. Italy has pledged to outline a plan to revive growth by 15 November.The retirement age as part of "old age" will be raised to 67 years from 2026 and a plan for disposal of public assets for at least five billion per year will be conducted over three years.

The growth plan aims to liberalize the Italian economy by opening markets to competition and to support business and innovation through tax deductions. The labor market will be reformed including "new rules of dismissals for economic reasons in the employment contracts of indefinite duration." All these commitments are recorded in the summit conclusions.The head of the Italian Government had been put up against the wall Sunday by its European partners, which required firm commitments on reform and a clear timetable for implementation in order to reassure the markets and to ensure that Italy is the next victim of the debt crisis, which would jeopardize the entire euro area.

The mass protests against new austerity measures continued Thursday in Greece for the second day, weakening the government of Socialist George Papandreou at the approach of a summit "crucial" in Brussels Sunday for the country and the euro area.

In Athens, more than 50,000 people participated in the movement, against 70,000 on Wednesday. Throughout the day, the unit staff, private sector employees prevailed. Thus Vanguélis Bouldadakis, in a public hospital doctor put forward "the destruction of the collective agreements" that "reduce our salaries" and "take our rights."The center of Athens was again sealed off to traffic, Parliament surrounded by dozens of vans of riot police and thousands of police.

Clashes marred the protest near the parliament. Fighting hand to hand and shots of lumber and iron protesters opposed to law enforcement. The latter, usually very active in the protests in Greece, had retired to the adjacent streets, sending only a few grenades and tear gas to try to disperse the crowd preventively.

A few sporadic incidents continued in the early evening around the Parliament and even in the tourist district of Monastiraki.Mobile groups of several dozen young people were harassing the police were carrying out acts of vandalism, burning trash, throwing molotov and stoning shop windows and street furniture.

Central to the dispute: a bill to be voted in Parliament to reduce the deficit abyss of the country and it avoid bankruptcy. Its adoption would freeze collective agreements and lead to a sudden drop in living standards of the Greeks, especially civil servants

These events have caused the death of a man. This woman had been transferred to hospital after violent incidents, died of a heart attack, said the hospital management. He "did no injury," Contrary to the media said, the hospital said in a statement. Justice has opened an investigation and sent an attorney for prosecution.The media for their part said that Mason had been hit by stones in the head on the sidelines of violent clashes between protesters and a group of communist troublemakers. The announcement of the death had raised strong emotions in Parliament, where MPs were to adopt in the evening a new law rigorously.

Rating agencies are again talking about them. After the decision by Moody's to consider placing the French note on negative watch, the issue of their decision-making arises. Back to agencies in four points.

How Does it take decisions?

This is the work of two people in the agency, "managing director" and the analyst in the country studied. They bring together a panel of several analysts (5 to 12 people), and a majority vote following a debate on the prospects of the country. The evaluation criteria focus on four principles. First results with the economic analysis of per capita GDP.Then they evaluate the level of indebtedness of the country with the analysis of public debt relative to national wealth. Third criterion, political strength of a country, a test that was particularly important when Standard and Poor's downgraded the United States in battle between Democrats and Republicans. Finally the agency is studying the history of default of the country. "Their decision is not from a macroeconomic model as is the case for the projections of the ministries or central banks. This is more of a qualitative opinion.Countries are alerted to the decision a few hours before it was released, "said Bertrand du Marais of the University of Nanterre on Slate.

Read: Why France must not lose its triple A

France, she deserves to be degraded?

Moody's decision to consider the placement of the note falls under supervision of course, not abuse. The situation of public accounts in France is worrying. With debt levels at 1.692 trillion euros (86.2% of GDP), Paris is – the 17 countries rated AAA by Moody's – one of the states with the most fragile public finances. The United States, degraded this summer by Standard and Poor's are worse (100%) but investors remain attracted by the U.S. debt. Furthermore, the primary deficit of France off the debt burden reached 3% of GDP, far more than its neighbors triple A rated, the Netherlands (1.6%) and Austria (0.5%).It is these figures that the agency emphasized. Moody's said the financial strength has "weakened (…) because the economic and financial crisis worldwide has led to a deterioration in its debt ratios that are among the most vulnerable countries rated AAA." That said, nothing to panic about the likely reduction of the note according to Alexandre Delaigue, an economics professor at Saint-Cyr and co-author of the blog econoclaste. "Overall, the consequences (a degradation) would be minimal because in fact the creditors have already as if France had already lost its best."

Also read: What I really want the rating agencies

And also: Credit rating agencies for Dummies

Why do we critique always agencies?

For several reasons. First, because they have made many mistakes in the past.After controversy over the rating of companies, including Enron, they were accused of having had a major responsibility in the crisis of suprime, giving the maximum for certain financial products that eventually led to the financial crisis. Moreover, they were criticized for their lack of transparency about the products noted. A former employee of Moody's recently revealed that some banks had withheld information to be rated by these agencies.

Today's critics include on Moody's. The agency would degrade too quickly some states. "Moody's has totally missed the Greek crisis and the subprime crisis. We realize that with Italy and Spain it is trying to change this image agency late. But it is clear that it is too brutal "said Norbert Gaillard, author of" rating agencies ".

How to reform?

Europe has raised the idea of ​​creating a European rating agency. The goal is to break the virtual monopoly of the three agencies, Standard and Poor's, Moody's and Fitch. But it would not address the accusations of bias, is Gunther Capelle-Blancard, professor at the University of Paris 1 Panthéon-Sorbonne and Deputy Director of CEPII. "The doubts about its independence would be very strong. The proof now European leaders are trying to put pressure on agencies that do not have the figures for Greece in such a negative." Norbert Gaillart advocates for its intervention by the European Central Bank. "The ECB should be the sovereign rating. It would do this based on his notes to her and this would allow it to be more independent rating agencies."

Read also: The European rating agency, such a good idea?

The rating agency Moody's Investors Service gave the first Monday penknife to the sacrosanct "AAA" rating of France, announcing that it gave three months to determine whether his perspective "stable" was still justified in view of the deteriorating economic situation."Over the next three months, Moody's will monitor and evaluate the stable outlook (the note of the country) in the light of progress made by the government to implement" the measures announced to reduce the budget deficit, said the agency rating in a statement.

France has currently the highest rating possible from Moody's (a "Aaa"), as from its main rival Standard & Poor's and Fitch Ratings. This high rating allows it to borrow on the markets in very favorable terms to finance its budget deficits. If the prospect of this note should be revised to "negative", this would imply that Moody's would likely reduce the medium-term (usually for a term of three to twelve months).And France would become the new big country, after the United States to lose the precious talisman financially.

The agency is careful to note that this review is part of its annual study on the accounts of France and that it is not – at this stage – a decision on the note country. But it is the first of three major rating agencies and to cast a shadow on the "Aaa" French. Last week, Moody's had yet to confirm the strength of the French note, after the announcement of the restructuring of the bank Dexia.

Keeping the promise of deficit reduction

In addition to the ability of the French government to meet its budget commitments, Moody's says it will consider in its deliberations "new negative developments in the economy or financial markets."In its statement, Moody's notes that the financial strength of the French government, although still very high, "has weakened, as is the case for other countries in the euro area, as the economic and financial crisis in the world has led to a deterioration in its debt ratios, which are now among the lowest rated countries Aaa + + ".

For Moody's, so it is "crucial" for France to maintain "investor confidence in its ability and willingness to deal with unforeseen challenges."Or "France could face a number of challenges in the coming months – such as the need for additional support to other European countries or its own banking system, which could increase so significant commitments that must support the country's budget, "said Moody's.

"The deterioration of debt ratios and the ability to see new potential liabilities are putting pressure on the prospect of stable rating Aaa + + of the country," said the agency. For Moody's, the French government now less room for maneuver in 2008 (…) "during the crisis of" subprime "." The continued commitment to implement economic reform measures and budgetary and visible progress in the goals "for reducing debt" will be important for maintaining the stable outlook "of the note of the country, the agency warns.

These remarks came as some voices in the G20 countries that the IMF to receive new funds to help Europe in particular.

Brazil is prepared to increase its contribution to the IMF, but he wants in return, emerging economies have more a say.

"Emerging markets may be asked to participate in the capitalization of the Fund (…) But for this they need to be more involved in managing the Fund, "said Dilma Rousseff at an event held in Porto Alegre in southern Brazil.

Last month, Brazil, combined with all other countries of BRIC – Russia, India, China and South Africa – had tried to coordinate support for the euro area.

Brazilian policy makers hope that the meeting of G20 finance ministers and central bankers held in Paris on Friday and Saturday leading to action.