Paul Taylor

PARIS (Reuters) – As governments around the euro zone are felled by a widening sovereign debt crisis, a perceived loss of sovereignty to the IMF and the European Union is raising prickly questions of democratic legitimacy.

Since the crisis began in late 2009, Ireland and Portugal have voted out governments that requested humiliating international bailouts after their borrowing costs spiralled out of control.

Now the Greek and Italian governments are both about to fall due to the strains of having to impose austerity measures and unpopular economic reforms to avert a debt meltdown.

And Spain’s Socialist government, which implemented tax rises, pay and pension cuts and labour market reforms to try to escape a similar fate, is set to be trounced this month in an early general election, all polls suggest.

Many of these changes are the result of natural wear-and-tear on long-serving governments in times of severe economic stress, or of voters punishing perceived mismanagement.

PARIS (Reuters) – As governments around the euro zone are felled by a widening sovereign debt crisis, a perceived loss of sovereignty to the IMF and the European Union is raising prickly questions of democratic legitimacy.

Since the crisis began in late 2009, Ireland and Portugal have voted out governments that requested humiliating international bailouts after their borrowing costs spiraled out of control.

Now the Greek and Italian governments are both about to fall due to the strains of having to impose austerity measures and unpopular economic reforms to avert a debt meltdown.

ATHENS/PARIS (Reuters) – Greece’s politicians agreed on Sunday to form a unity government to approve a euro zone bailout, with Prime Minister George Papandreou due to step down to break an impasse after the EU demanded its parties join forces to avert bankruptcy.

Discussion on who would lead the new government would continue on Monday, the office of the Greek president said after the European Union gave Greece 24 hours to show how it will enact its 130 billion euro emergency funding package.

“Today was a historic day for Greece,” Greek government spokesman Ilias Mossialos told reporters. A new government would be sworn in and hold a confidence vote within a week if all went to plan, he said.

ATHENS/PARIS (Reuters) – The European Union turned up the heat on bickering Greek politicians on Sunday to agree a crisis coalition, demanding progress toward backing an international bailout deal in the next 24 hours.

In a sign that Greece’s political deadlock may be easing under EU pressure, a senior socialist said Prime Minister George Papandreou had made clear he would resign once a coalition deal was done, possibly as soon as Sunday night.

With euro zone finance ministers due to meet on Monday, senior socialist lawmaker Telemachos Hitiris said: “Everything must be done within the day, otherwise tomorrow it will be hell.”

PARIS (Reuters) – Europe has a new informal leadership directorate intent on finding a solution to the euro zone’s debt crisis, but it has yet to prove its ability to come up with a lasting formula.

Forged in the fire of a bond market inferno, the shadowy so-called Frankfurt Group has grabbed the helm of the 17-nation currency area in a few short weeks.

The inner circle comprises the leaders of Germany and France, the presidents of the executive European Commission and of the European Council of EU leaders, the heads of the European Central Bank and the International Monetary Fund, the chairman of euro zone finance ministers, and the European Commissioner for economic and financial affairs.

PARIS, Nov 6 (Reuters) – Europe has a new informal
leadership directorate intent on finding a solution to the euro
zone’s debt crisis, but it has yet to prove its ability to come
up with a lasting formula.

Forged in the fire of a bond market inferno, the shadowy
so-called Frankfurt Group has grabbed the helm of the 17-nation
currency area in a few short weeks.

The inner circle comprises the leaders of Germany and
France, the presidents of the executive European Commission and
of the European Council of EU leaders, the heads of the European
Central Bank and the International Monetary Fund, the chairman
of euro zone finance ministers, and the European Commissioner
for economic and financial affairs.

PARIS (Reuters) – The European Union stepped up pressure on Sunday for Greece to establish rapidly a national unity government to implement a new bailout programme, saying Athens’ continued membership of the euro area was at stake.

EU Economic and Monetary Affairs Commissioner Olli Rehn told Reuters: “We have called for a national unity government and remain persuaded that it is the convincing way of restoring confidence and meeting the commitments.”

Greece had breached confidence with its euro zone partners last week and had put itself on a path towards leaving the single currency, but now appeared to be on its way back from the brink, he said.

PARIS (Reuters) – The European Union stepped up pressure on Sunday for Greece to establish rapidly a national unity government to implement a new bailout program, saying Athens’ continued membership of the euro area was at stake.

EU Economic and Monetary Affairs Commissioner Olli Rehn told Reuters: “We have called for a national unity government and remain persuaded that it is the convincing way of restoring confidence and meeting the commitments.”

Greece had breached confidence with its euro zone partners last week and had put itself on a path toward leaving the single currency, but now appeared to be on its way back from the brink, he said.

CANNES, France (Reuters) – Group of 20 nations have agreed to move “more rapidly” toward flexible exchange rates in a draft action plan for growth that adopts stronger language on currency rates than previous statements by the club of leading economies.

The draft, which went to G20 leaders for final approval at a summit on Friday, also mentions China by name for the first time in the context of greater currency flexibility.

Beijing has long faced pressure from western nations to allow its yuan currency to float more freely but has refused to bow to those demands.

CANNES, France, Nov 4 (Reuters) – Group of 20 nations have
agreed to move “more rapidly” towards flexible exchange rates in
a draft action plan for growth that adopts stronger language on
currency rates than previous statements by the club of leading
economies.

The draft, which went to G20 leaders for final approval at a
summit on Friday, also mentions China by name for the first time
in the context of greater currency flexibility.

Beijing has long faced pressure from western nations to
allow its yuan currency to float more freely but has refused to
bow to those demands.