Opinion

Paul Taylor

Greece to hold new election, jolts euro markets

Paul Taylor
May 15, 2012 14:38 UTC

ATHENS/PARIS, May 15 (Reuters) – Attempts to form a
government in Greece collapsed on Tuesday, jolting financial
markets at the prospect leftists opposed to the terms of an EU
bailout could sweep to victory and nudge the euro zone crisis
into a dangerous new phase.

The turmoil in Athens sent waves around other troubled
members of the 17-nation European single currency area. The euro
slipped below $1.28 while Spanish and Italian bond yields
rose above the danger level of 6 percent as investors scurried
for shelter in safe haven German Bunds.

The tremors from Greece, compounding worries about Spain’s
debt-laden banking system, ended any honeymoon for new French
President Francois Hollande, thrusting the growing risks to the
euro zone to the top of the agenda for his first meeting with
German Chancellor Angela Merkel hours after he took office.

In his inaugural address, the Socialist president called for
a European pact to revive growth and temper German-driven
austerity measures, seeking to change the direction of euro zone
economic policy.

“I will propose to our partners a pact that will tie the
necessary reduction of our public debt to the indispensable
stimulation of our economies,” Hollande declared, saying Europe
needed “projects, solidarity and growth”.

Hollande sets out growth agenda for Europe

Paul Taylor
May 15, 2012 12:07 UTC

PARIS/BERLIN, May 15 (Reuters) – New French President
Francois Hollande called for a European pact for growth to
balance out German-driven austerity measures in his inaugural
address on Tuesday, hours before taking his challenge to
Chancellor Angela Merkel in Berlin.

Sworn in with all the pomp of the French Republic, Hollande
won support from Germany’s opposition Social Democrats (SPD),
who vowed to use their parliamentary blocking power to delay
ratifying a European budget discipline treaty until Merkel
accepts accompanying measures to boost growth and jobs.

“I will propose to our partners a pact that will tie the
necessary reduction of our public debt to the indispensable
stimulation of our economies,” the Socialist president said in
his 10-minute maiden speech.

Over-complex Europe keeps making same mistakes

Paul Taylor
May 14, 2012 09:57 UTC

PARIS (Reuters) – Americans call it a Rube Goldberg machine, Britons a Heath Robinson contraption and the Danes a Storm P machine.

The European Union’s policy-making system often resembles one of those cartoon designs of an implausibly convoluted system for achieving a simple task – held together by sticking plaster, string, frequent tinkering and plenty of wishful thinking.

What is striking when you compare Europe’s policies on agriculture, monetary union and climate change is the similarity of the way the EU keeps bolting on patches and extra wiring to try to fix problems created by its own solutions.

Analysis: Over-complex Europe keeps making same mistakes

Paul Taylor
May 14, 2012 06:03 UTC

PARIS (Reuters) – Americans call it a Rube Goldberg machine, Britons a Heath Robinson contraption and the Danes a Storm P machine.

The European Union’s policy-making system often resembles one of those cartoon designs of an implausibly convoluted system for achieving a simple task – held together by sticking plaster, string, frequent tinkering and plenty of wishful thinking.

What is striking when you compare Europe’s policies on agriculture, monetary union and climate change is the similarity of the way the EU keeps bolting on patches and extra wiring to try to fix problems created by its own solutions.

EU turns the screw on Athens before repeat vote

Paul Taylor
May 10, 2012 14:35 UTC

BRUSSELS (Reuters) – In a loosely coordinated strategy, the EU’s top officials, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, have telephoned Greek party leaders in recent days to spell out that if Greece wants to stay in the euro it must abide by the terms of the EU/IMF bailout, several sources said.

German Chancellor Angela Merkel, her finance minister, Wolfgang Schaeuble, and other influential voices such as European Central Bank executive board member Joerg Asmussen have delivered the same message publicly

European leaders have concluded that Greece will need a second election and aim to apply enough pressure on politicians and voters by then to engineer a majority in favor of Athens’ bailout. Privately, European Union officials are alarmed at the potential turmoil for the euro currency area if Greece were to tear up its austerity program and default on its debt.

Hollande meets Van Rompuy to discuss euro, growth

Paul Taylor
May 9, 2012 17:43 UTC

PARIS (Reuters) – French president-elect Francois Hollande began his drive to persuade European partners to shift their economic policy priority from austerity to growth when he met on Wednesday with European Council President Herman Van Rompuy.

Hollande takes his call to add growth elements to Europe’s fiscal compact to Berlin next week.

European Union officials said they have high hopes for the new French leader and his ability to build a working relationship with German Chancellor Angela Merkel that could revive blocked efforts to overcome the euro zone’s debt crisis

EU sees Spain missing budget goals, Madrid sticks to target

Paul Taylor
May 9, 2012 15:26 UTC

BRUSSELS/MADRID May 9 (Reuters) – Spain is set to miss its
deficit reduction targets this year and next unless it takes new
measures, the European Commission will forecast on Friday, but
Madrid insists the targets will be met, Spanish and EU officials
said.

The EU’s executive arm will announce on Friday its economic
forecasts for the 27 countries in the European Union for this
year and next, including growth, budget deficit and debt rates.

Spain’s borrowing costs have soared on investor concerns
that the government may have to bail out the banking sector.
Madrid has promised to reduce the public deficit to 5.3 percent
of gross domestic product (GDP) this year from 8.5 percent in
2011, and to 3 percent in 2013.

Anti-austerity ballot backlash shakes euro zone

Paul Taylor
May 7, 2012 15:08 UTC

ATHENS/PARIS (Reuters) – An anti-austerity backlash by voters in Greece and France shook the euro zone on Monday, sending the euro currency and shares sliding on deepening doubts about the ability of Athens to survive in the single currency area.

Greece, where Europe’s sovereign debt crisis began in 2009, plunged into turmoil after a general election boosted far-left and far-right splinter groups, stripping mainstream parties that back a painful EU/IMF bailout of their parliamentary majority.

That raised questions over whether the country could avert bankruptcy and stay in the euro as Antonis Samaras, leader of the conservative New Democracy party which won the biggest share of the vote, tried to cobble together a government.

Socialist Hollande ousts Sarkozy as French leader

Paul Taylor
May 6, 2012 21:54 UTC

PARIS (Reuters) – Socialist Francois Hollande swept to victory in France’s presidential election on Sunday in a swing to the left at the heart of Europe and promised to start a pushback against German-led austerity policies.

Hollande led conservative incumbent Nicolas Sarkozy by 51.3 percent to 48.7 percent with 83 percent of votes counted, the Interior Ministry said, bringing the centre-left back to government in Paris after a decade in opposition.

“Europe is watching us,” the president-elect said in a victory speech in his constituency of Tulle in central France. “I’m sure that in many European countries there is relief and hope at the idea that austerity does not have to be our only fate.”

Hollande seen winning parliament while UMP could implode

Paul Taylor
May 3, 2012 11:00 UTC

PARIS (Reuters) – Socialist Francois Hollande can expect a left-wing parliamentary majority if he wins Sunday’s presidential runoff, and the far-right National Front could shake President Nicolas Sarkozy’s conservative UMP party to its foundations.

If Hollande is elected, as all opinion polls show, history suggests voters will grant him a working majority in legislative elections on June 10 and 17, as they have each time a new president has just been installed.

The only doubt is whether his centre-left Socialist party would have an absolute majority or need support from Communist or Green deputies to pass laws.

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