Global News Journal
Beyond the World news headlines
Who do you call when you want to speak to Europe? The question, long attributed to Henry Kissinger, has yet to be answered convincingly by the 27-country European Union.
Six months ago, European Commission President Jose Manuel Barroso told a news conference the person to call on foreign policy issues was Catherine Ashton, who had just been chosen as the European Union’s foreign affairs chief. The “so-called Kissinger issue is now solved”, he said.
Ashton reinforced that view on Monday by suggesting she was the person to call if Iran wanted to discuss the latest diplomatic moves on its nuclear programme. “They have my phone number,” she said.
But Barroso was more vague at the news conference last November when asked whom U.S. President Barack Obama should call if he wanted to speak to the EU. He pointed out that the EU was not one country, like the United States, China or Russia — implying they each had one clear leader. He seemed to be saying that the person you have to call depends on circumstances or the nature of the problem a foreign leader wishes to discuss.
Never let it be said that the European Union doesn’t get things done.
It may have a slightly maddening way of going about it — last-minute, late-night summits, hours and hours of sweaty, closed-door negotiation, multiple conflicting plans put forward by the likes of the Finns, the Italians and, who knows, the Estonians – and then, hey presto, like the proverbial rabbit out of a hat, at 2 in the morning, a $1 trillion deal to haul the world back from the debt-crisis abyss. All in the name of European unity.
As one Brussels policy analyst put it somewhat delphically : “The EU is not crisis resistant, but perhaps it is crisis proof.”
from Jason Subler:
My colleague Edmund Klamann offers this dispatch from the Shanghai World Expo:
Outdoors at the sprawling Shanghai World Expo site on opening day, ubiquitous loud-speakers warned the afternoon crowd of hundreds of thousands that the line to enter the German Pavilion was three hours long and they should visit other pavilions.
But inside the Greek Pavilion, where Deputy Prime Minister Theodoros Pangalos spoke to a small group of staff and dignitaries at an opening ceremony, the impatience was palpable as his country's larger European neighbours deliberate over rescue measures.
Credit rating agencies cannot win.
They were blamed for carelessness before the crisis, handing out over-generous ratings on the packets of mortgage-backed securities that subsequently unravelled, sending the global economy into a spin and leading to Lehman Brothers collapse. Now they are being criticised again, this time for being too cautious, by dishing out rating downgrades to countries in Europe being sucked into Greece’s debt crisis.
Standard & Poor’s recently downgraded Spain’s rating one notch to AA, warning that the outlook was bleak for the euro zone’s fourth biggest economy. Struggling Greece has also been marked down — to junk status — and now hovers close to Pakistan and Venezuela in the credit stakes. Portugal is another country to be singled out for downgrades from the leading ratings companies.
Greece and the euro zone are still very much in the midst of a debt and deficit storm, with not just Athens but possibly Portugal and Spain at risk of being swept up in the maelstrom.
But that hasn’t stopped economists and political analysts looking for a silver lining in this unprecedented meltdown.
from Emily Flitter:
Quelling the European debt crisis will take more than just a bailout package for Greece, says one expert in financial contagion. Other countries with shaky fiscal profiles need to get their finances in order--and fast.
Lasse Pedersen, a professor of finance at New York University's Stern School of Business, has made a close study of liquidity spirals in financial markets, and he sees parallels between his work and the European crisis.
After five months of struggling to stay afloat in the quicksand of a debt crisis, Greece has finally asked the European Union and the IMF to throw it a lifeline.
Some might think that’s the end of it — Greece now has access to up to 45 billion euros in special funds, it can finance its deficit and refinance its debts at better rates, and speculators (who have metaphorically been stepping on Greece’s head while it thrashes around in the quicksand) have to beat a retreat.
The 16 countries that share the euro single currency have agreed they will help Greece out if it needs. So far so good. But only now is the nitty-gritty of how member states will go about paying for their contributions being hammered out. And suddenly things are getting a little complicated.
Italy announced on Tuesday it would have to issue government bonds — known as BTPs – to raise funds for its part in any Greek assistance.
The surge in the spread of Greek bond yields over German ones since European leaders issued a promise of emergency loans to Greece last month indicates financial markets do not believe the pledge of euro zone support is anything more than a bluff.
And they are itching to call it.
Euro zone leaders have been betting that a promise of loans to Greece and strong words of political support will be enough to calm markets and allow Athens to borrow at more reasonable rates, therefore rendering any real aid — the dreaded bailout — unnecessary.