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EUROZONE FINANCE MINISTERS will meet in Brussels today in the latest of a series of attempts to agree measures to keep the single currency from meltdown.
Ministers from the 17 euro-area countries will hope to reassure markets that they are taking action against the ongoing debt crisis, as even US president Barack Obama weighed in with a call for swift action.
“If Europe is contracting, or if Europe is having difficulties, then it’s much more difficult for us to create good jobs here at home,” Obama said yesterday as he met EC president Herman van Rompuy in Washington.
Today’s discussions are expected to focus on ways to achieve greater integration, giving the EU more centralised control over the fiscal policies of individual nations, CNN reports.
Van Rompuy said in Washington: “We are aiming for binding rules to ensure strong fiscal and economic discipline in all countries to go hand in hand with fiscal and economic integration in the euro area as a whole.”
Meanwhile, it’s reported that attempts to boost the power of the European Financial Stability Fund to around €1trillion by leveraging it four or five times have failed. According to the Guardian, EFSF head Klaus Regling is expected to tell finance ministers that international commitments to take invest in the scheme have failed to materialise.
This is likely to increase the pressure towards ‘eurobonds’, or Stability Bonds – a single debt vehicle for the entire eurozone – as a way to stabilise jumpy debt markets. Germany has strongly resisted the idea, which would likely increase its own borrowing costs.
A report yesterday suggested that Germany was examining plans to issue bonds between six “elite” members of the eurozone with stronger economies – effectively beginning the process of separation into a two-tier EU.
Pressure will be on the finance ministers to find a solution today after the OECD warned yesterday that “swift and decisive” action is necessary. “The situation in the euro area is rapidly deteriorating,” OECD deputy secretary-general Pier Carlo Padoan said.
- Additional reporting from the AP
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Obama telling EU to get its house in order???
Mc Donalds telling farmers don’t harm cows, What’s next?
Well in all fairness he was much more humble than last time he spoke to Euro-leaders. He knows that the same way US brought down European economy few years back, we may be about to do the same to US in this echo effect…
It’s run up to election time in the States. This is just Obama’s way of telling the electorate there it’s not his fault that almost 1 in 10 of them is unemployed.
He’s just another politician that wants to get re-elected at the end of the day.
America has a vast debt, but it still is a very resourceful and productive economy. It still has its own currency, a currency that is the reserve currency of the world and in which Oil is priced in. It has a lot going for it. No doubt that there will have to be immense changes in America for it to overcome its debt problems.
It may be in casualty but the Euro is in emergency.
Another pointless summit meeting which will agree nothing in way of substance. This just smacks of moving around the deckchairs on the Titanic.
Agree. But at least they get a free lunch.
I disagree, there will be many,many pages of articles and reports about more integration, treaty change and solidarity. All in all, a great day’s work in Europe.
The EU is consistently inept and a slow moving behemoth. It is the Ottoman Empire of its day, without the architecture. All in
Kerry, “But at least they get a free lunch.” Yeah free for them but, YOU along with every other tax payer in the EU are paying for it! The bastards should be locked in room with just bread and water and kept there until they find a workable solution and only then should they be allowed out! See how fast they agree a solution then!
Oh just get on with it already. We ALL know the Euro is doomed… FFS….
really?
@ David, the only way I can see it being saved is full Fiscal Union and some sort of debt forgiveness across the board. This tinkering around with the edges stuff is getting us no where.
It’s all going to happen over Christmas/ New Year folks, the Euro will be split into strong and weak.
We will be devalued by 10-20%, hard in the short term, but good in the long.
I hope you are right, the above would be a great relief to the world economy. It is also the only way to avoid a collapse.
If they weren’t so wedded to their Superstate vanity project, this would have been done years ago. It would also have been a more realistic approach at the very start.
Which way will France go. While they should be in a weaker Euro, their EU nationalism will dictate that their leadership go with Germany. Given that their banks, are so exposed to Greece and Italy, they will take a substantial loss.
I hope this happens, but they are fanatics at the top of the EU, they’ll fight this all the way.
Don’t be fooled people. This “crisis” is being used to further European integration without any democratic legitimacy. The people are never consulted on matters of integration, because if they were, the people would stop it. Down with the Euro I say, back to the punt. It will be extremely difficult for a few years, but ultimitely we will be better off.
Unfortunately this is true, they are using this to push integration, over the people. Two problems emanate from this. 1. An acceleration of the view of Europe as undemocratic across the continent, especially in countries that now have unelected leaders. 2. Ignoring the fact that the Euro zone’s financial position and credibility is falling on a daily basis. Treaty changes are not going to change that.
Debt crisis are only resolved by debt write off, inflation and good growth.
The ECB is opposed to the first one, the second is opposed by the Germans and the 3rd is not going to happen for a few more years, even if the crisis is resolved tomorrow.
sing the verse below … its just as easy as crying it……………….rolling rolling rolling keep those printing machines rolling or it will be rawhide for us all
I don’t think that there’s anything that can be done to stabilise “jumpy” markets.
I think “the markets” desperately want the Euro to fail. A poster on a previous thread posted an interview with one speculator who stood to make a 65,000% profit if the Euro goes under.
Not a typo.
And I don’t believe that he’s the only one.
It also stands to reason that more, weaker, fluctuating currencies means more profits for currency speculators.
The return Irish punt will open us to more speculative attacks in the future. These speculators are the scum of humanity. Think things are bad now think of a 20% import cost increase.
While no fan of rampant psycho capitalism, that speculator is only making a killing on an event that was widely predicted from the day talk of the Euro started.
He can’t be faulted for taking a punt (Pun intended) on an event that was likely to happen, when it offered such astounding returns.
The Euro in its current form is not going to last, it is time to face up to that. It will be an achievement if it see’s Jan 1st, the card is marked.
I’m more worried that people who’ve placed massive bets on the Euro’s collapsing are actively working to bring this about. Weren’t there concerted speculative attacks on Italy and Spain in the past fortnight? Reminds me of Black Wednesday and the ERM.
Plus, I’m not a believer in the “invisible hand sets the bond yields” line, taking “the markets” to be neutral utility maximising machines. This is a conscious decision by real people, connected by social class, ideology and a political agenda.
Personally, I have no great attachment to the Euro, but I think the current quagmire has causes going beyond its intrinsic weaknesses. And I wouldn’t like to see it collapse until after the end of 2012, seeing as Mr. Noonan thought it a good idea to extend the bank guarantee ’till then.
Maybe they are, but they do not push against solid walls. They would be ignoring the no’s if they weren’t betting against the Euro.
Italy has 3-400 in debt to roll over in the next 12 months. No one knows how it will do that. France is going to be downgraded shortly, it would have been so already, but for political pressure and threats from the EU.
No doubt the markets are assholes and not out for the good of anyone but this is a plain call
If the Euro survives 2011, it will be quiet an achievement. It will not survive 2012, unless they degrade it to a soft currency, which is really just more can kicking.
Italy’s debt is projected to hit 157% in 2014, it is a dead duck.
Not disagreeing with your appraisal, but I think that this is a stark illustration of who wields real power in 2011 – not sovereign governments, not the EU, not even the Germans, but “the markets”.
I’d be more comfortable with the EU and the Euro, for all their faults, than the whims of the “free market”.
They’ll talk and talk…and then talk some more and in the meantime the whole Euro project is hurtling to the abyss….in my opinion the currency will not exist come Xmas Eve..Germany are so hell bent on keeping their low interest ethos they’re pushing everyone else to the cliff edge….usless meeting..will achieve nothing and is only prolonging the agony. France and Germany have repeatedly said they’re fully committed to the Euro yet are doing little or nothng to save it other thn inflicting utter misery on others. Bondholders should have been forced to discount their loans 12 months ago.
have your say