In banking, few values count more than consistency and integrity. The sovereign debt crisis in Europe, however, appears to have watered down those values in the case of some banks. The International Accounting Standards Board has stated that some European banks used the value provided by the Greek government in determining how much value Greek bonds should be counted in the assets of the bank. That would mean the bonds would be worth about 21% less than  than the original valuation. 

The debt crises of European Union member-states have reached critical mass. Three of the "PIIGS" nations — Portugal, Ireland, and Greece — and likely the other two — Italy and Spain — are simply too deeply in debt to pay off the principal and interest on national government bonds without massive help from other European nations, specifically Germany. And Germans are increasingly upset at how their government and that of France are attempting to solve the catastrophe.

The European Union has threatened Sweden with legal action unless it rescinds its first issuance of wolf-hunting licenses in 45 years. Swedish Minister for the Environment Andreas Carlgren announced that his country has no wish to engage in long legal proceedings in Brussels, the de facto capital of the European Union, which would be the next step if the EU member-state failed to comply.

The bad news from the European Union is growing almost daily. Germany, the largest economy in Europe, had almost no economic growth at all in the last quarter The entire 17-nation European Union grew at the miniscule rate of .2 percent from the prior quarter. The prior quarter’s eurozone economic growth had been .8 percent, larger than last quarter but still far short of what is required to create confidence that the sovereign debt crisis can actually be managed. That represents the slowest economic growth since late 2009. The French economy also stalled during the quarter and the Italian economy grew only .3 percent.

The Italian government revisited its plans for handling the nation’s gaping public debt problem. On Friday, Prime Minister Silvio Berlusconi (left) said that tax increases and spending cuts would both be in the new austerity plan.  The tax increases included a “special levy” on income above €90,000 per year as well as tax increases on income from financial investments.  More specifically, there would be a surcharge of 5 percent on incomes above €90,000 and a 10-percent surcharge on incomes above €150,000. The tax rate on financial income would increase from the current level of 12.5 percent to 20 percent. The government also pledged to crack down on tax evasion.