Paul Taylor

BRUSSELS (Reuters) – The euro zone is out of the emergency ward, but it may face a chronic debilitating illness rather than a rapid convalescence.

The challenges confronting Europe now are to avoid complacency, rekindle economic growth while cutting debt and prevent national politics pulling the currency area apart.

Last week’s European Union summit was the first in two years that was not totally dominated by fire-fighting in the currency bloc’s sovereign debt crisis. The relief was audible.

“This was not – and that is an innovation – a meeting focused on crisis management,” European Commission President Jose Manuel Barroso said. “It was a meeting focused on growth.”

Three events have changed the mood and calmed financial markets that appeared late last year to be betting on a breakup of Europe’s 13-year-old single currency.

BRUSSELS (Reuters) – European Union leaders argued on Thursday over the right balance between budget austerity and reviving lost growth at the first summit for two years in which the euro zone debt crisis did not eclipse all else.

After their finance ministers gave provisional approval to a second bailout for Greece, and a flood of cheap European Central Bank funds calmed bond markets, the 27 leaders used the breathing space to focus on structural economic reforms and other ways to combat record unemployment.

They also agreed to give Serbia candidate status for EU membership and reappointed former Belgian Prime Minister Herman Van Rompuy for a second 2-1/2-year term as president of the European Council, adding the role of chairing new twice-yearly summits of the 17-member euro zone.

BRUSSELS (Reuters) – European Union leaders wrestled on Thursday with the balance between budget austerity and reviving lost growth at the first summit for two years in which the euro zone debt crisis did not eclipse all else.

With a second bailout for Greece almost in place and a flood of cheap European Central Bank funds calming bond markets, the 27 leaders have a breathing space to focus on structural economic reforms and other ways to combat record unemployment.

Leaders of 25 countries will sign a German-driven fiscal compact treaty on Friday to enforce EU deficit-cutting and debt reduction rules more strictly.

BERLIN/PARIS (Reuters) – German Finance Minister Wolfgang Schaeuble is in for a torrid weekend in Mexico City.

Chancellor Angela Merkel is so concerned to get a second bailout for Greece approved by her parliamentary majority next Monday that she has hardened Berlin’s stance against any increase in the euro zone’s financial firewalls.

As a result, Schaeuble will face the combined forces of the International Monetary Fund, the United States, China, Japan and most of his European partners at a G20 finance ministers’ meeting demanding that Europe does more to fight its sovereign debt crisis before they will offer an extra cent.

BERLIN/PARIS (Reuters) – German Finance Minister Wolfgang Schaeuble is in for a torrid weekend in Mexico City.

Chancellor Angela Merkel is so concerned to get a second bailout for Greece approved by her parliamentary majority next Monday that she has hardened Berlin’s stance against any increase in the euro zone’s financial firewalls.

As a result, Schaeuble will face the combined forces of the International Monetary Fund, the United States, China, Japan and most of his European partners at a G20 finance ministers’ meeting demanding that Europe does more to fight its sovereign debt crisis before they will offer an extra cent.

PARIS (Reuters) – Like drunks at a bar door, the euro zone’s governments and banks are leaning unsteadily on each other for support.

The banks know they have to sober up, but governments are urging them to have one more for the road.

Europe’s policymakers may have managed to stop the entire building from swaying in the last few weeks, but they have not yet found a way to break the dangerous mutual dependency between overindebted states and overleveraged banks.

PARIS (Reuters) – Like drunks at a bar door, the euro zone’s governments and banks are leaning unsteadily on each other for support.

The banks know they have to sober up, but governments are urging them to have one more for the road.

Europe’s policymakers may have managed to stop the entire building from swaying in the last few weeks, but they have not yet found a way to break the dangerous mutual dependency between over indebted states and overleveraged banks.

PARIS, Feb 13 (Reuters) – Europe’s left is torn
between outrage and anxiety over drastic cuts in living
standards and working conditions being imposed on Greeks by the
European Union and the International Monetary Fund.

Indignation at sweeping pay and pension reductions and
public sector job cuts dictated by official creditors in return
for a second bailout of the debt-ridden euro zone state is
strongest in south European countries that fear a similar rod.

Yet there is scant sympathy from centre-left politicians and
labour leaders in northern Europe, where voters are more worried
at the potential cost to themselves of repeated bailouts, nor in
former communist central Europe, where people are more inured to
hardship.

PARIS (Reuters) – Things must be getting desperate if Angela Merkel is intervening in French politics to try to save Nicolas Sarkozy from defeat.

The normally cautious German chancellor is taking a big risk by planning campaign appearances in support of the French leader ahead of the April 22 first round of a presidential election, starting with a joint television interview on Monday.

If, as all opinion polls suggest, Socialist challenger Francois Hollande defeats the conservative Sarkozy in a May 6 run-off, Merkel will have to rebuild the Franco-German European leadership duo from scratch with a man she has snubbed.

PARIS (Reuters) – Things must be getting desperate if Angela Merkel is intervening in French politics to try to save Nicolas Sarkozy from defeat.

The normally cautious German chancellor is taking a big risk by planning campaign appearances in support of the French leader ahead of the April 22 first round of a presidential election, starting with a joint television interview on Monday.

If, as all opinion polls suggest, Socialist challenger Francois Hollande defeats the conservative Sarkozy in a May 6 run-off, Merkel will have to rebuild the Franco-German European leadership duo from scratch with a man she has snubbed.