Opinion

Paul Taylor

Do-little G20 summit leaves markets unperturbed

Paul Taylor
Jun 28, 2010 12:46 UTC

PARIS (Reuters) – Stock markets perked up on Monday after world leaders failed to agree on a global bank levy and softened the timetable for new capital requirements at a do-little G20 summit in Canada which posed questions about the forum’s effectiveness.

Shares climbed in Europe and Asia, led by banks, after the U.S. Congress adopted a landmark financial regulation package on Friday and the G20 dropped a 2012 deadline for banks to adopt more stringent risk-provisioning rules.

Leaders of the main developed and emerging economies papered over differences on the balance between reviving economic growth and cutting budget deficits at weekend talks in Toronto, in what was seen as a setback for U.S. President Barack Obama.

In a reversal of the unity of the past three crisis-era G20 summits, the leaders left room for each country to move at its own pace and adopt “differentiated and tailored” policies.

European leaders emerged with what they saw as green light to pursue austerity measures they consider essential to restore market confidence in the euro dented by the Greek fiscal crisis and wider concerns about high European sovereign debt.

French Asterix resists austerity in word only

Paul Taylor
Jun 28, 2010 06:06 UTC

PARIS (Reuters) – Barricaded in the last free village in Gaul, plucky little Asterix is resisting the massed armies of austerity that have swept across Europe threatening to snuff out economic recovery.

That, at least, is the picture French President Nicolas Sarkozy would like to convey to his domestic audience.

Britain has just announced eye-watering public spending cuts and tax increases. Greece, Spain, Portugal and Italy have all imposed stiff deficit reduction measures. Even Germany, Europe’s biggest and most creditworthy economy, is planning 80 billion euros in savings measures over the next four years.

Europeans act alone on bank tax before G20

Paul Taylor
Jun 23, 2010 01:38 UTC

PARIS/BERLIN (Reuters) – Germany, France and Britain announced plans on Tuesday to introduce a bank levy to help meet the costs of the financial crisis, without waiting for a G20 summit this week, underscoring a rift with key partners.

A joint statement said the three biggest European economies were “committed to the full implementation of the ambitious G20 financial sector reform agenda,” but the timing of the tax move suggested the Europeans have low hopes of any global deal.

G20 finance ministers dropped the idea of a common levy this month due to Canadian and Japanese resistance. But European Union leaders, under pressure to justify austerity measures to their voters, renewed a call for international action last week.

German-Spanish whispering wars hit euro zone

Paul Taylor
Jun 18, 2010 14:29 UTC

PARIS (Reuters) – A whispering war between German and Spanish officials has exacerbated the euro zone’s debt crisis this month, keeping financial markets on edge and exposing deep frustrations in Berlin and Madrid.

European diplomats say the background to the leaks and counter-leaks lies in pressure from Germany — Europe’s economic powerhouse and main paymaster — for Spain to take tougher austerity measures to cut its huge budget deficit.

The Germans seem to have fired the first shot, telling journalists in Berlin on condition of anonymity on June 7 — the day the German coalition agreed on its own austerity package — that Spain was on the brink of seeking a European Union bailout.

France and Spain move on reforms before EU summit

Paul Taylor
Jun 17, 2010 06:40 UTC

MADRID/PARIS (Reuters) – Spain and France announced politically unpopular labour and pension reforms on Wednesday in the face of financial market pressure on euro zone states to clean up their finances.

Pressure grew for European regulators to publish results of stress tests on individual banks to restore market confidence and overcome a partial freeze in inter-bank lending. Such tests show banks’ ability to withstand liquidity problems.

On the eve of a European Union summit in Brussels that was expected to approve tougher fiscal rules to prevent a repetition of the Greek debt crisis, the European Commission and the International Monetary Fund denied Spain was about to seek financial help.

France, Spain set reforms amid euro zone pressure

Paul Taylor
Jun 16, 2010 17:28 UTC

MADRID/PARIS (Reuters) – Spain and France announced politically unpopular labour and pension reforms on Wednesday in the face of unrelenting financial market pressure on euro zone states to clean up their finances.

On the eve of a European Union summit that is expected to approve tougher fiscal rules to prevent a repeat of the Greek debt crisis, the European Commission and the IMF were forced to deny a new report that Spain is on the brink of seeking a financial help.

The risk premium investors demand to hold Spanish debt rather than benchmark German bonds rose to a euro lifetime high of 223 basis points due to bailout rumours ahead of a closely watched Spanish bond auction on Thursday.

Eurozone economic government? Nein danke!

Paul Taylor
Jun 14, 2010 07:15 UTC

PARIS (Reuters) – Does the euro zone need an economic government? Oui, say the French. Nein danke, say most Germans.

Beyond the immediate push for stricter budget discipline to surmount Europe’s sovereign debt crisis, the struggle over the future of the single currency area revolves around the idea of a political authority to coordinate national economic policies.

To many in the outside world — the United States, China and the International Monetary Fund — the crisis has exposed design flaws in Europe’s 11-year-old monetary union and shown the need for closer political and economic union to underpin it.

France, Germany still out of synch on euro zone

Paul Taylor
Jun 8, 2010 15:34 UTC

LONDON (Reuters) – You don’t have to be Einstein, or Hercule Poirot, to work out that there was more behind the last-minute cancellation of Monday’s Franco-German summit than a little scheduling problem.

True, Chancellor Angela Merkel had just wrapped up a 36-hour marathon coalition negotiation on budget cuts when she asked President Nicolas Sarkozy to postpone his visit to Berlin by one week, according to French and German officials.

But the underlying problem is that Germany and France, the founders and driving forces behind the single European currency, do not see eye-to-eye on the future of the euro zone, nine days before a crucial European Union summit on the issue.

Euro markets weaken on bank debt worries

Paul Taylor
Jun 1, 2010 15:59 UTC

PARIS, June 1 (Reuters) – Euro zone financial markets
weakened on Tuesday amid rising concern about banks’ bad debts
and doubts about the pace of economic recovery.

France reaffirmed a longstanding call for a formal economic
government of the 16-nation euro area, which has aroused German
suspicions in the past of an attempt to undermine the
independence of the European Central Bank. [ID:nPAB008371]

The European Commission defended to trade unionists the need
for austerity measures to curb public debt and deficits swollen
by the financial crisis, as new data showed unemployment hit an
almost 12-year high of 10.1 percent in the euro zone in May.
[ID:nLDE65019A]

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