Paul Taylor

Support grows for lengthening Greek debt payback

Paul Taylor
Jan 31, 2011 12:26 UTC

PARIS/ATHENS (Reuters) – Support is gaining ground in the euro zone for giving Greece more time to pay back its EU bailout to avoid default and ease the worst-indebted EU state’s debt burden, although details still have to be pinned down.

German Finance Minister Wolfgang Schaeuble, whose country is pivotal to any solution as Europe’s strongest economy, did not rule out a radical reprofiling of Greek debt in a television interview broadcast on Sunday evening.

“Most market participants expect this problem to be tackled in a responsible way,” Schauble said when asked whether Athens would be forced to restructure its debt.

Reuters reported on Friday that German central bank chief Axel Weber, frontrunner to be the next president of the European Central Bank, has suggested transforming international rescue lending to Greece and Ireland into 30-year loans in a bid to draw a line under the euro area’s debt crisis.

Weber floated his idea in closed-door talks with finance ministers, central bankers and private bankers at the World Economic Forum in Davos, two euro zone sources said.

Tough times for diplomacy in post-WikiLeaks world

Paul Taylor
Jan 30, 2011 17:07 UTC

DAVOS, Switzerland (Reuters) – If ministers and diplomats have learned a single lesson from the WikiLeaks saga, it is this: write nothing down.

Behind the closed doors of a supposedly confidential Davos forum panel discussion, policymakers, diplomats, journalists and a buzz of social networkers gathered this weekend to ponder the uncertain future of diplomacy in the digital age.

“This session is off the record, whatever that means in the digital age,” the moderator began, noting that delegates had breached the confidentiality of other World Economic Forum debates by sending Twitter messages live from the room.

Stay in our economy and out of our politics-Tunisia

Paul Taylor
Jan 29, 2011 16:16 UTC

DAVOS, Switzerland, Jan 29 (Reuters) – Tunisia’s new
government sent a high-level delegation to Davos on Saturday
with a message to the world’s business and power elite: please
stay in our economy and keep out of our politics.

Two weeks after a popular uprising dubbed the “Jasmine
Revolution” drove authoritarian President Zine al-Abidine Ben
Ali from power, ministers from the second interim government
travelled to the Swiss ski resort to reassure investors at the
World Economic Forum that the new Tunisia is open for business.

“The international community can contribute in two ways:
firstly try not to do any harm to us,” said Mustapha Kamel
Nabli, who became central bank governor 10 days ago.

Euro zone crisis seen turning corner

Paul Taylor
Jan 29, 2011 11:59 UTC

DAVOS, Switzerland, Jan 29 (Reuters) – European policymakers
and international bankers at the Davos forum said on Saturday
the euro zone’s debt crisis had turned a corner and any doubt
about the survival of the single currency area had passed.

German Finance Minister Wolfgang Schaeuble told a World
Economic Forum panel he did not expect the 17-nation euro zone
to suffer any further major crises. Member states were drawing
lessons and moving towards convergence in their economic and
social policies.

“I don’t expect that there will be further major shocks,”
Schaeuble said. “I think the euro will be stable.”

EU may extend Greek, Irish bailouts to 30 years-source

Paul Taylor
Jan 28, 2011 20:09 UTC

DAVOS, Switzerland, Jan 28 (Reuters) – European Union
officials are considering extending euro zone bailout loans to
Greece and Ireland to 30 years in a bid to draw a line under the
bloc’s debt crisis, two euro zone sources said on Friday.

The sources said European Central Bank Governing Council
member Axel Weber, head of Germany’s influential Bundesbank, had
suggested stretching out the maturities from three years for
Greece and seven for Ireland as part of a comprehensive package
to overcome the crisis.

The idea surfaced in intensive talks among euro zone
ministers, central bankers and officials on the sidelines of the
World Economic Forum in Davos this week, the sources said.

Ukraine hits Russia gas plans, inks Azeri deal

Paul Taylor
Jan 28, 2011 19:01 UTC

DAVOS (Reuters) – Ukraine’s president clinched energy pacts with Azerbaijan on Friday and attacked Russia for plans to bypass his country in supplying gas to Europe, reviving market fears of regular spats between Moscow and Kiev.

Markets were relieved when Viktor Yanukovich, perceived as friendlier to the Kremlin than his predecessor, Viktor Yushchenko, was elected Ukraine’s president last year.

That followed five years of disputes between the ex-Soviet neighbors, marked by mid-winter cuts in Russian gas supplies to Europe that represent a quarter of the continent’s total needs.

Europe may hold early euro summit in March

Paul Taylor
Jan 28, 2011 18:36 UTC

BERLIN/DAVOS, Jan 28 (Reuters) – Europe signalled increased
urgency on the eurozone crisis on Friday with the possibility of
a special summit sooner than expected, while Germany aired the
reforms it might want in exchange for more emergency support.

With German opposition to increasing the euro bailout fund
appearing to soften, euro zone sources said the European Union
was considering extending bailout loans to Greece and Ireland to
30 years in a bid to draw a line under the bloc’s debt crisis.

Euro zone sources said the special summit could take place
in early March after criticism it was moving too slowly.
Austrian Chancellor Werner Faymann was quoted on Friday as
saying there was a need to inject more urgency into the decision
about the raising the capacity of the eurozone bailout fund.

France open to increasing EFSF size, bond buys “an option”

Paul Taylor
Jan 28, 2011 13:35 UTC

DAVOS, Switzerland (Reuters) – Europe’s rescue fund should be increased in size if needed to tackle the region’s debt crisis, and could be retooled so that it can buy bonds, French Economy Minister Christine Lagarde said on Friday.

Lagarde called for the fund to be made more flexible, while Greece’s finance minister said letting his country buy back government bonds at a discount on the market was worth considering.

Those funds could, in theory, be provided by European Financial Stability Facility (EFSF), but some northern euro zone states, including EU powerhouse Germany, oppose such a move.

Greek finmin: discussing buying back bonds below par

Paul Taylor
Jan 28, 2011 08:16 UTC

DAVOS, Switzerland, Jan 28 (Reuters) – Greek Finance
Minister George Papaconstantinou said on Friday that allowing
the country to buy back government bonds at a discount on the
market was worth considering but would require funding.

Papaconstantinou also told Reuters Insider television at the
World Economic Forum in Davos that Greece could return to the
debt market by the end of this year and reiterated that Athens
will not restructure its debt to private creditors.

Asked about buying back Greece’s bonds below par,
Papaconstantinou said: “To do that you need money and so it is
one of the ideas that is being discussed, not officially… It’s
an idea that that deserves some discussion, like others.”

Sarkozy tells JP Morgan’s Dimon banks “defied common sense”

Paul Taylor
Jan 27, 2011 15:57 UTC

DAVOS, Switzerland (Reuters) – French President Nicolas Sarkozy clashed with the chief executive of U.S. investment bank JP Morgan Chase at the Davos forum on Thursday, telling him bankers had done things which defied common sense.

JP Morgan boss Jamie Dimon had earlier in the day lashed out at persistent bank bashing nearly three years after the global credit crisis began, saying it was “unproductive and unfair.”

But when he rose at a later session to ask Sarkozy a question about regulation of banks, the French president launched into a broadside blaming financiers for their behavior, which he said had caused the crisis.