Dysfunctional government bond markets in several euro area countries hamper the single monetary policy because the way this policy is transmitted to the real economy depends also on the conditions of the bond markets in the various countries. An impaired transmission mechanism for monetary policy has a damaging impact on the availability and price of credit to firms and households.

This is the very important monetary policy reason for the ECB’s non-standard measures. But of course, such interventions can only be limited. Governments must – individually and collectively – restore their credibility vis-à-vis financial markets.

Even as the European debt crisis intensified during November, unlike other financial markets,
commodity markets traded mostly sideways, ending the month up 1%. This is a reflection of the
two offsetting, but intensifying forces commodity markets face, as they continue to navigate
between a potential economic crisis whirlpool on one side and rocks on the other side, which the
market will likely run up against should demand not falter and supply constraints force price spikes
to balance the market.
Slow growth may help commodity markets balance in 2012
As our economists roll out a 4.1% 2013 global GDP forecast, the real
concern is the more near-term outlook for 2012 where they have reduced
their global GDP forecast from 3.4% to 3.2%. This reduced outlook, but
avoidance of global recession, makes it more likely that commodity
markets can maintain a central course between the whirlpool of a world
economic recession and the rocks of potential shortages. Accordingly, we
are maintaining our 2012 commodity price forecasts with an end-of-2012
price forecast for Brent oil of $127.50/bbl. We are also introducing an endof-
2013 price forecast for Brent oil of $135/bbl.

The Group is undertaking an exchange offer on its Tier 2 capital securities which are eligible for call in 2012, with the exception of those already being treated on an economic basis.

This decision has been taken (i) in light of ongoing market volatility and regulatory uncertainty and (ii) as a consequence of the effects of a prohibition on capital calls which was imposed on the Group as part of the restructuring plan mandated by the European Commission following the receipt of state aid by the Group during 2009.

The Exchange Offer also provides the Group with an opportunity to improve the quality of the Group’s capital base.

The latest data released this morning by Markit and the Chartered Institute of Purchasing and Supply showed more signs of weakness in the UK economy, as manufacturing sector activity contracted in November for the second consecutive month.

The purchasing managers’ index (PMI) for manufacturing fell back to 47.6 in November, down from 47.8 the previous month and further away from the 50.0 threshold that indicates contraction in the sector. This indicates that manufacturing activity is shrinking at its fastest rate for almost two and a half years, since June 2009, and is well down from a position of relative strength at the start of this year.

This acceleration in the downturn for the sector is likely to lead to more job losses, as the PMI for manufacturing employment plunged to 46.2 – a steep drop from a reading of 49.6 in October and suggesting the fastest reduction in headcounts in two years.

Today’s release highlights the rapidly deteriorating outlook for the real economy, and corroborates Cebr’s view of a contraction in UK output for the final quarter of this year. Furthermore, economic conditions in the Eurozone pose a risk to growth over the medium term – the Governor of the Bank of England warned earlier this week that the banking system might not be robust enough to absorb the impact of a Eurozone collapse. If this happens, negative growth in 2012 can also be expected, despite central bank measures announced yesterday to ease pressure in financial markets.

Advent International, along with the company’s management, now controls 90% of Oberthur Technologies’ capital. Jean-Pierre Savare, founder of the Oberthur group and his family retain a 10% stake in the capital. The transaction is valued at 1.15 billion Euros.

The group posted sales of 814.5 million Euros for the fiscal year 2010.

“We are delighted to be part of the continuing development of this leading French industrial company, the world number two in smart card technologies, created by Jean-Pierre Savare nearly 25 years ago,” said Pascal Stefani, Head of Advent International in France. “Thanks to our international presence and our deep experience in the banking and telecommunications industries, in which we have been investing for over 20 years, we are well positioned to actively support the management in its growth plan for the business, including through acquisitions.”

* M&A: HSBC (Gilles Collombin, Pierre-Emmanuel Houillier)
* Corporate: Weil Gotschal & Manges (Jean Beauchataud, Romy Richter)
* Financing: Marlborough Partners (Romain Cattet, David Parker), Shearman & Sterling (Peter Hayes)
* Finance: KPMG (Florent Steck)
* Strategic: Bain & Co (Jérôme Brunet, Grégory Garnier)
* Legal, social, Tax: TAJ (Ariane Chateaux, Olivier Venzal)
* Insurance: Marsh (Humbert d’Autichamps)
* Environment: ERM (Julien Famy)

The Oberthur group was advised by:

* M&A: Rothschild (Cyrille Harfouche, Guillaume Vigneras)
* Corporate: White & Case (Hughes Mathez, Natalie Negre-Evillard)
* Finance: E&Y (Gilles Marchadier, Anne Fabre)
* Legal, social, Tax: Landwell (Remi Montredon, Cecile Debin)

The management was advised by:

* Finance: Callisto (Hervé Couffin, Charles de Rozières)
* Legal: Mayer Brown (Xavier Jaspar, Alexandre Dejardin)