Opinion

Paul Taylor

Euro area agrees bond support for Italy, Spain

Paul Taylor
Jun 29, 2012 04:03 UTC

BRUSSELS (Reuters) – Euro zone leaders agreed on Friday to take emergency action to bring down Italy’s and Spain’s spiraling borrowing costs and to create a single supervisory body for euro zone banks by the end of this year, a first step towards a European banking union.

Responding to pleas from Spanish and Italian leaders, a midnight summit of the 17-nation currency area agreed that euro area rescue funds could be used to stabilize bond markets without forcing countries that comply with EU budget rules to adopt extra austerity measures or economic reforms.

After hours of argument, they also agreed that the bloc’s future permanent bailout fund, the European Stability Mechanism, would be able to lend directly to recapitalize banks without increasing a country’s budget deficit, and without preferential seniority status.

“The process was tough, the outcome was good,” Italian Prime Minister Mario Monti told reporters, adding that Italy did not intend “at this time” to apply for the emergency support.

Countries that requested bond support from the rescue fund would have to sign a memorandum of understanding setting out their existing policy commitments and agreeing a timetable. But they would not face the intrusive oversight of a “troika” of international lenders to which Greece, Ireland and Portugal have been subjected, Monti said.

Germans say “Nein! No! Non!” ahead of euro summit

Paul Taylor
Jun 28, 2012 09:02 UTC

BERLIN/BRUSSELS (Reuters) – EU leaders go into a Brussels meeting on Thursday more openly divided than at any time since the euro crisis began, with Germany’s Chancellor Angela Merkel showing no sign of relenting in her refusal to back other countries’ debts.

Merkel is being urged at home to stay tough and reject all efforts to make Germany underwrite European partners’ debts or banks, while her EU partners say that may be the only way to save the single currency.

“Nein! No! Non!” shouted a headline splashed across the front page of the normally sober German business daily Handelsblatt, with a commentary by its editor-in-chief saying Merkel must remain firm at the two-day summit.

Europe’s Tower of Babel hampers euro solution

Paul Taylor
Jun 25, 2012 05:52 UTC

PARIS (Reuters) – As Europe considers a leap towards closer integration to try to save the euro single currency, it resembles the biblical Tower of Babel – unable to complete an ambitious project because the residents don’t speak the same political and economic language.

The spotlight is on Germany, France, Italy and Spain, the euro area’s four biggest economies, wrestling over proposals for a banking union, joint euro zone bonds and handing more control over national budgets and economic policy to the European Union.

But Europe’s Babel features 27 often fierce national debates in member states, each of which has the power to block any change to EU treaties, including 10 countries which are not members of the currency.

Analysis: EU’s Spain bank rescue may bring only brief respite

Paul Taylor
Jun 11, 2012 11:28 UTC

PARIS (Reuters) – Euro zone finance ministers rushed Spain into an EU-funded rescue for its debt-stricken banks to pre-empt the threat of a bank run if Greece’s debt crisis flares again but any respite for Madrid and the euro may be short-lived.

After weeks of insisting that Spain needed no assistance to recapitalize lenders crippled by bad debts from a burst real estate bubble, Prime Minister Mariano Rajoy was pushed into requesting an aid package for fear of worse disaster to come, European officials involved in the negotiations said.

The 17-nation currency area agreed to lend Madrid up to 100 billion euros ($125 billion) for its bank rescue fund, more than an initial audit suggests it is likely to need, in an attempt to reassure investors and erect a new firewall in the crisis.

ANALYSIS: EU’s Spain bank rescue may bring only brief respite

Paul Taylor
Jun 11, 2012 11:19 UTC

PARIS (Reuters) – Euro zone finance ministers rushed Spain into an EU-funded rescue for its debt-stricken banks to pre-empt the threat of a bank run if Greece’s debt crisis flares again but any respite for Madrid and the euro may be short-lived.

After weeks of insisting that Spain needed no assistance to recapitalize lenders crippled by bad debts from a burst real estate bubble, Prime Minister Mariano Rajoy was pushed into requesting an aid package for fear of worse disaster to come, European officials involved in the negotiations said.

The 17-nation currency area agreed to lend Madrid up to 100 billion euros ($125 billion) for its bank rescue fund, more than an initial audit suggests it is likely to need, in an attempt to reassure investors and erect a new firewall in the crisis.

Firemen and architects race to save euro edifice

Paul Taylor
Jun 11, 2012 09:41 UTC

PARIS (Reuters) – Architects and firemen are racing to save the euro zone from destruction, trying to redesign the edifice even as flames are leaping from the outhouses towards the core of the building.

As always since the start of Europe’s debt crisis in late 2009, the builders are working on a different timescale from the firefighters, posing a risk that the house may burn down before new buttresses and extensions are approved and in place.

While investors’ confidence in the ability of European leaders to stem the debt crisis has been ebbing by the day, the redesign now under discussion to strengthen the currency’s foundations will take months, if not years.

Analysis: Firemen, architects race to save euro edifice

Paul Taylor
Jun 11, 2012 06:06 UTC

PARIS (Reuters) – Architects and firemen are racing to save the euro zone from destruction, trying to redesign the edifice even as flames are leaping from the outhouses towards the core of the building.

As always since the start of Europe’s debt crisis in late 2009, the builders are working on a different timescale from the firefighters, posing a risk that the house may burn down before new buttresses and extensions are approved and in place.

While investors’ confidence in the ability of European leaders to stem the debt crisis has been ebbing by the day, the redesign now under discussion to strengthen the currency’s foundations will take months, if not years.

EU’s Spain bank rescue may bring only brief respite

Paul Taylor
Jun 10, 2012 15:51 UTC

PARIS (Reuters) – Euro zone finance ministers rushed Spain into an EU-funded rescue for its debt-stricken banks to pre-empt the threat of a bank run if Greece’s debt crisis flares again but any respite for Madrid and the euro may be short-lived.

After weeks of insisting that Spain needed no assistance to recapitalize lenders crippled by bad debts from a burst real estate bubble, Prime Minister Mariano Rajoy was pushed into requesting an aid package for fear of worse disaster to come, European officials involved in the negotiations said.

The 17-nation currency area agreed to lend Madrid up to 100 billion euros ($125 billion) for its bank rescue fund, more than an initial audit suggests it is likely to need, in an attempt to reassure investors and erect a new firewall in the crisis.

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