Opinion

Paul Taylor

Analysis – Europe’s state of disunion hinges on sovereignty

Paul Taylor
Sep 28, 2011 14:32 UTC

PARIS (Reuters) – When European Commission President Jose Manuel Barroso began his annual State of the Union address by declaring that “we are facing the greatest challenge in the history of our union,” it was an understatement rather than hyperbole.

The sovereign debt crisis shaking the euro zone puts at risk the survival of the single currency and ultimately the wider 27-nation European Union with its single market, open borders and free movement of capital, goods and people.

“If we do not go for further integration, we risk fragmentation,” Barroso told the European Parliament. “We need to complete our monetary union with an economic union.”

Confidence and trust in governments and in Europe is at a low ebb. The financial turmoil if Greece defaulted, as many economists expect within months, would be unlikely to leave Europe’s rules-based market unscathed in the long term.

Resurgent nationalism and populism could tear Europe apart, Barroso warned.

The crisis requires a united front. Yet the EU is politically more disunited than for decades.

Analysis – Chinese demand could hasten euro zone bonds

Paul Taylor
Sep 19, 2011 13:05 UTC

PARIS (Reuters) – While European politicians battle over whether to issue common euro zone bonds to help resolve the currency area’s sovereign debt crisis, China could influence the outcome.

Europe is Beijing’s biggest export market and Chinese leaders have a declared interest in avoiding a financial meltdown in the European Union that could trigger a world recession.

They want to diversify their $3.2 trillion (2.03 trillion pounds) in foreign exchange reserves away from U.S. Treasury bonds and started long before Standard & Poor’s downgraded U.S. debt last month due to Washington’s political gridlock over reducing its deficit.

Chinese demand could hasten euro zone bonds

Paul Taylor
Sep 19, 2011 08:27 UTC

PARIS (Reuters) – While European politicians battle over whether to issue common euro zone bonds to help resolve the currency area’s sovereign debt crisis, China could influence the outcome.

Europe is Beijing’s biggest export market and Chinese leaders have a declared interest in avoiding a financial meltdown in the European Union that could trigger a world recession.

They want to diversify their $3.2 trillion in foreign exchange reserves away from U.S. Treasury bonds and started long before Standard & Poor’s downgraded U.S. debt last month due to Washington’s political gridlock over reducing its deficit.

Greek default jitters hammer French banks, euro

Paul Taylor
Sep 12, 2011 11:10 UTC

PARIS, Sept 12 (Reuters) – Growing fears of a Greek default
sent a hurricane through heavily exposed French banks on Monday
and hit the euro as investor confidence in the European currency
area’s ability to surmount a sovereign debt crisis ebbed.

Shares in Societe Generale , BNP Paribas
and Credit Agricole slumped by more than 10 percent
amid expectations of an imminent downgrade by credit ratings
agency Moody’s, due largely to their exposure to Greek bonds.

The shock resignation of European Central Bank chief
economist Juergen Stark last Friday, and weekend comments by
German politicians suggesting Athens may have to default and be
“suspended” from the euro zone, drove the euro to a
10-year low against the yen and a 7-month low against the
dollar.

Stark ECB exit hits shaky euro zone at worst time

Paul Taylor
Sep 12, 2011 06:38 UTC

PARIS (Reuters) – The resignation of the top German official at the European Central Bank could hardly have come at a worse time for euro zone policymakers as they grope for a way out of the deepest crisis in the single currency’s 12-year history.

The ECB is the one institution that has kept the euro zone afloat in the sovereign debt crisis and prevented a bond market meltdown. The European Union has no federal government or common fiscal authority and speaks with many dissonant voices.

Juergen Stark’s departure from the ECB’s Executive Board in despair at the policy of buying government bonds to prevent the crisis spreading comes as policymakers in Berlin and beyond are preparing for the growing possibility of a Greek default.

Analysis: Stark ECB exit hits shaky euro zone at worst time

Paul Taylor
Sep 11, 2011 09:38 UTC

PARIS (Reuters) – The resignation of the top German official at the European Central Bank could hardly have come at a worse time for euro zone policymakers as they grope for a way out of the deepest crisis in the single currency’s 12-year history.

The ECB is the one institution that has kept the euro zone afloat in the sovereign debt crisis and prevented a bond market meltdown. The European Union has no federal government or common fiscal authority and speaks with many dissonant voices.

Juergen Stark’s departure from the ECB’s Executive Board in despair at the policy of buying government bonds to prevent the crisis spreading comes as policymakers in Berlin and beyond are preparing for the growing possibility of a Greek default.

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