German Finance Minister: We're Giving $283 Billion To The EFSF And "That's It. Finished."

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German Finance Minister Wolfgang Schaeuble ruled out a larger German contribution to the European Financial Stability Facility in an interview published Saturday, according to Sky News.

"The European Financial Stability Facility has a ceiling of 440 billion euros, 211 billion of which is down to Germany. And that is it. Finished,'" he told magazine Super-Illu.

This is the latest in a string of comments from Schaeuble that have wrecked hopes for an EFSF capable of recapitalizing European banks or taking on larger debts from peripheral Europe.

Dow Jones also reports that Schaeuble ruled out leveraging the EFSF in a meeting with the Free Democrats (FDP) on Tuesday.

Despite Schaeuble's criticism of expanding the fund, his tune could change after a meeting October 9 between German Chancellor Angela Merkel and French President Nicolas Sarkozy. Reports say the meeting will be focused on speeding the economic integration of Europe, a proposal German voters are likely to reject.

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Dodgy Italian Minister Let Off The Hook

Last week, Italian member of parliament Marco Milanese evaded arrest because his colleagues in Italy’s parliament voted against a request by magistrates to have him handcuffed and taken away.

Despite being indicted in relation to mafia related offences, this week, Italy’s Agriculture Minister Saversio Romano survived a no-confidence motion in Italy’s parliament yesterday.  After the results of the vote were in, Romano was duly hugged by Italy’s Prime Minister Silvio Berlusconi.

Many, including this blogger, were disgusted by the outcome of the vote.

The appointment of Saverio Romano as Italy’s Agriculture Minister was controversial in view of allegations that he’d been working to assist organized crime in southern Italy.  Romano denies wrongdoing.

Romano had also been a close associate of one  Salvatore “Totò” Cuffaro, an ex-president of the mafia infested region of Sicily.  Cuffaro is currently doing time for colluding with the mafia.

While working with ex-president of Sicily Cuffaro, Romano attended a meeting with mafia boss Angelo Siino. Siino is nicknamed the mafia’s minister for public works, incidentally.  The meeting took place way back in the very early 90s and concerned support for the 1991 regional elections in Sicily.

Italy’s Agriculture Minister is also under investigation for bribery and a couple of mafia turncoats have mentioned Romano’s name too.  It has to be said that evidence provided by mafia turncoats is not always reliable and it can hardly be argued that ex-mafia members are men of good character.

Still, investigators, who were on the point of dropping the mafia collusion charges Romano faced at one point, would rather like to have a chat with Romano about his contacts and acquaintances.  Indeed they will.  In the meantime though, Italy keeps a minister of dubious integrity.

In normal times, a minister who is suspected of mafia connections could, possibly, be tolerated.  But these are not normal times.  The Berlusconi government is scandal ridden and Italy is suffering from a distinct lack of credibility at international level.  Not only this, but new Berlusconi party secretary and former justice minister Angelino Alfano recently claimed in a Berlusconi party re-launch speech that “honesty” would be one of the party’s watchwords.

Even more surprising is that Italy’s mafia busting interior minister Roberto Maroni lent his support to Romano. Hopefully he knows something we don’t.  If this is the case, perhaps he would not mind telling us.

Once again, as with the Milanese case I wrote about last week, Italy’s Berlusconi government is sending out the wrong messages to both Italians and to those who might have been considering investing in Italy.

When will Italy wake up?  Probably when it’s far too late.

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Greek Finance Minister Describes Options: 20% Haircut, 50% Haircut, Disorderly Default

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Greek Financial Minister Evangelos Venizelos has told fellow socialists he sees three scenarios for Greece, according to Ta Nea via Bloomberg.

In the "good" scenario, Europe hands over the bailout money along with a 20% writedown for bondholders.

In the "better" [second best] scenario, the bailout accords fall apart and Greece enters an orderly default with 50% haircuts.

In the "bad" scenario, the bailout accords fall apart and Greece begins a disorderly default.

This isn't an official position, however, and a government spokesperson has dismissed report, according to Reuters.

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Turkish Prime Minister Says Israel "Must Pay A Price For Its Crimes"

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Turkish Prime Minister Recep Tayyip Erdogan gave his most aggressively anti-Israeli speech yet at a Arab League meeting in Cairo, the Financial Times reports.

Erdogan said Israel "must pay a price for its aggression and crimes it has committed," citing an attack on a Turkish flotilla last year and the killing of five Egyptian soldiers.

He also called for the Israeli siege of Gaza to be lifted and rallied for the admittance of Palestine to the U.N.

Earlier this month, Turkey expelled Israeli diplomats, continuing a steady worsening of relations between the countries.

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UK Minister Accidentally Reveals To The Cameras A Controversial Report On Afghanistan

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Britain's ruthless paparazzi just photographed another top-secret document as Development Secretary Andrew Mitchell walked out of a meeting.

The Daily Mail has more:

Andrew Mitchell was photographed clutching a confidential briefing paper saying Hamid Karzai's decision to step down would improve the country's prospects 'very significantly'.

In a humiliating blunder the International Development Secretary inadvertently displayed the file, marked 'Protect – Policy', as he left a meeting at No?10.

Daily Mail also has photos.

Previously assistant commissioner Bob Quick was photographed with sensitive terror documents, as have other UK politicians.

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Get To Know Japan's Likely Next Prime Minister And What He Means For The Yen

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The ruling Democratic Party of Japan elected another finance minister as its chief, all but guaranteeing that Yoshihoko Noda will become the next prime minister.

Noda has participated in multiple interventions against the strengthening yen, including last week's $100 billion fund to help companies investing abroad.

Despite his record, however, the yen remained strong following the announcement. FX traders may have noted that none of Yoda past interventions were successful in weakening the currency.

Yoda favors raising taxes to deal with Japan's debt and stagnant economy, according to VOA.

Meanwhile the government signaled a conservative monetary policy as Economic and Fiscal Policy Minister Kaoru Yosano said today the Bank of Japan should not underwrite Japanese government bonds: "We have no new medicine. We have to take the same remedies (as taken in the past) to cope with the same illness."

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