Financial Regulatory Forum

ANALYSIS-EU faces battle over closer economic union

By Timothy Heritage

BRUSSELS, May 21 (Reuters) – Agreeing on a $1 trillion safety net may prove the easy part of saving the euro now the European Union’s leaders are turning to the divisive issue of tightening economic policy coordination.

The European Commission wants to reinforce economic surveillance and budget discipline to strengthen the euro zone and prevent a repeat of Greece’s debt crisis in any of the other 15 countries that use the single currency.

But a battle is looming over the proposals even before the first meeting on Friday of a task force set up by EU President Herman Van Rompuy to come up with ideas on how to toughen EU budget rules and improve policy coordination.

A call by the Commission to see governments’ budget plans before they are submitted to national parliaments has caused some countries to fear their sovereignty is threatened.

Divisions have also been exposed by a German ban this week on short-selling, despite a vow by Berlin and Paris on Thursday to work together on the euro zone crisis.

FACTBOX – Coming events in euro zone debt crisis

April 12 (Reuters) – Following are upcoming events in the

euro zone debt crisis:

(more…)

EU leaders reach deal to rescue Greece

By Marcin Grajewski and Jan Strupczewski

BRUSSELS, Feb 11 (Reuters) – European leaders have reached a deal to provide aid to Greece, EU president Herman Van Rompuy said on Thursday, in an unprecedented move to stave off a broader crisis in the 16-nation bloc that shares the euro.

“There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders,” van Rompuy told reporters gathered at an EU leaders’ summit.

The agreement was forged in talks between Van Rompuy, European Commission President Jose Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and Greek Prime Minister George Papandreou.

Euro zone holds intensive talks on Greek rescue

By Matthias Sobolewski and Renee Maltezou

BERLIN/ATHENS, Feb 10 (Reuters) – Euro zone countries held intensive talks on Wednesday on a possible rescue for Greece, whose debt crisis has shaken the entire currency union, as civil servants staged the first big strike against Athens’ austerity plans.

Financial markets gave Greece some respite as investors hoped that other European governments would help Athens to head off a possible default on its debt repayments.

Finance ministers of the 16 countries that share the common European currency scheduled a video conference for Wednesday to discuss the issue, a European Commission spokesman said.

European governments agree to help Greece – source

Seeking Alpha

Seeking Alpha

By Matthias Sobolewski

BERLIN, Feb 9 (Reuters) – European governments have agreed in principle to help heavily indebted Greece, a senior German coalition source said on Tuesday, in what would be the first rescue of a euro zone member in the currency’s 11-year history.

“The decision on help for Greece has been taken in principle within the euro zone,” said a source in the German coalition government who has knowledge of the negotiations.

Various options were under consideration and no final decision had been taken but the most likely possibility was to offer “bilateral help,” the source said.

Policymakers try to calm markets after euro sell-off

By Andrei Khalip

LISBON, Feb 5 (Reuters) – European policymakers scrambled on Friday to reassure markets about the stability of the 16-nation currency bloc as investors shed euro assets for a second day and Portugal backed a law that may push its swollen deficit higher.

European Central Bank Governing Council member Ewald Nowotny tried to play down a sharp fall in the euro, which hit its lowest level against the dollar since May 2009, and called talk of a euro zone breakup “absurd”.

Greek Prime Minister George Papandreou, on a visit to India, promised to “credibly apply” an austerity programme designed to bring his country’s yawning debt and deficit under control.

ANALYSIS-After hardball, Greece gets EU solidarity pledges

EU High Representative for Foreign Affairs Catherine Ashton (L) poses with Greek Prime Minister George Papandreou during a European Union leaders summit in Brussels December 10, 2009.  REUTERS/Yves Herman By Brian Love, European Economics Correspondent

PARIS, Dec 11 (Reuters) – Reassuring noises from France and Germany suggest Greece can ultimately count on help from its euro zone partners if its debt problems get out of hand — though its partners were content to see financial markets scare Athens for a while.

As Greek bond spreads ballooned early this week, officials in major European Union governments indirectly fuelled the panic by refraining from making clear pledges of support for Greece.

Most of the officials’ public statements focused on urging Athens to face up to its problems and, like Ireland, take drastic steps such as public spending cuts to reduce its budget deficit and prevent its debt from becoming unserviceable.

  •