Paul Taylor

CANNES, France (Reuters) – The leaders of Germany and France told Greece on Wednesday it would not receive another cent in European aid until it decides whether it wants to stay in the euro zone.

They also made clear that saving the euro was ultimately more important to them than rescuing Greece.

After emergency talks with Greek Prime Minister George Papandreou, German Chancellor Angela Merkel said: “We would rather achieve a stabilization of the euro with Greece than without Greece, but this goal of stabilizing the euro is more important.”

Sarkozy hammered home the same message, telling a joint news conference with Merkel: “Our Greek friends must decide whether they want to continue the journey with us.”

Papandreou outraged European partners and caused panic on financial markets by announcing on Monday that Greece would hold a referendum on a second bailout plan negotiated with euro zone leaders last week.

CANNES, France (Reuters) – The leaders of Germany and France told Greece on Wednesday it would not receive another cent in European aid until it decides whether it wants to stay in the euro zone.

They also made clear that saving the euro was ultimately more important to them than rescuing Greece.

After emergency talks with Greek Prime Minister George Papandreou, German Chancellor Angela Merkel said: “We would rather achieve a stabilisation of the euro with Greece than without Greece, but this goal of stabilising the euro is more important.”

PARIS (Reuters) – Prime Minister George Papandreou’s call for a referendum on the latest Greek bailout plan has blown a potentially fatal hole in the euro zone’s strategy to overcome its sovereign debt crisis.

Whether or not a plebiscite takes place, and whatever the result, Papandreou’s gamble guarantees long weeks of political uncertainty just when the 17-nation currency area was desperate for a period of calm to implement remedies agreed last week.

It will make it harder, if not impossible, to restore investors’ confidence in most euro zone government debt in the short term and to lure Chinese and other wealth funds to pour billions into European sovereign bonds.

PARIS (Reuters) – Prime Minister George Papandreou’s call for a referendum on the latest Greek bailout plan has blown a potentially fatal hole in the euro zone’s strategy to overcome its sovereign debt crisis.

Whether or not a plebiscite takes place, and whatever the result, Papandreou’s gamble guarantees long weeks of political uncertainty just when the 17-nation currency area was desperate for a period of calm to implement remedies agreed last week.

It will make it harder, if not impossible, to restore investors’ confidence in most euro zone government debt in the short term and to lure Chinese and other wealth funds to pour billions into European sovereign bonds.

PARIS (Reuters) – Ask senior European Union policymakers in private what can stop the euro zone’s festering sovereign debt crisis and the answer is “the European Central Bank”.

The federal institution at the heart of the 17-nation currency area could declare itself Europe’s lender of last resort, reassuring markets that there will always be someone to buy member states’ bonds.

Economists from New York to Beijing are convinced such a move, backed by the central bank’s power to print money, would stop the run on Italian and Spanish debt swiftly and help restore confidence in the euro area.

PARIS (Reuters) – Ask senior European Union policymakers in private what can stop the euro zone’s festering sovereign debt crisis and the answer is “the European Central Bank.”

The federal institution at the heart of the 17-nation currency area could declare itself Europe’s lender of last resort, reassuring markets that there will always be someone to buy member states’ bonds.

Economists from New York to Beijing are convinced such a move, backed by the central bank’s power to print money, would stop the run on Italian and Spanish debt swiftly and help restore confidence in the euro area.

PARIS, Oct 25 (Reuters) – French Socialist presidential
candidate Francois Hollande aims to visit Germany soon to
present himself as a credible, fiscally prudent partner in
European leadership ahead of next year’s election, a senior aide
said on Tuesday.

Pierre Moscovici, Hollande’s campaign manager in this
month’s Socialist primary, said the frontrunner in opinion polls
for the 2012 election would go to Berlin before the end of the
year and wanted to meet Chancellor Angela Merkel as well as the
opposition Social Democrats and Greens.

Moscovici said conservative President Nicolas Sarkozy had
turned France into a weak “junior partner” for Germany by
failing to control public finances and taking impulsive,
ill-coordinated initiatives in the euro zone debt crisis.

BRUSSELS (Reuters) – First the good news: European leaders are nearing a strategy to counter the euro zone’s sovereign debt crisis. Now, the less good news: it has some apparent flaws and may fall apart.

Under an emerging deal likely to be struck on Wednesday, Greece’s debt will be reduced, European banks will be recapitalised, the euro zone’s rescue fund will scaled up to provide partial insurance in sovereign bond markets, and Italy will be pressured into getting serious about economic reform.

Each of those planks may fall short of expectations.

The euro and stocks rose after Sunday’s first part of a two-leg summit on hopes that Europe is finally close to adopting a comprehensive response to the two-year-old crisis, which has sent shudders through the global economy.

BRUSSELS (Reuters) – First the good news: European leaders are nearing a strategy to counter the euro zone’s sovereign debt crisis. Now, the less good news: it has some apparent flaws and may fall apart.

Under an emerging deal likely to be struck on Wednesday, Greece’s debt will be reduced, European banks will be recapitalized, the euro zone’s rescue fund will scaled up to provide partial insurance in sovereign bond markets, and Italy will be pressured into getting serious about economic reform.

Each of those planks may fall short of expectations.

The euro and stocks rose after Sunday’s first part of a two-leg summit on hopes that Europe is finally close to adopting a comprehensive response to the two-year-old crisis, which has sent shudders through the global economy.

NEW YORK/PARIS (Reuters) – A double-notch downgrade to Spain’s credit ratings has piled more pressure on European leaders to make rapid progress on solving the region’s debt crisis or face unbearable borrowing costs.

The fresh blow from Moody’s Investors Service came just a day after the agency warned France its triple-A rating could be at risk.

“If the euro zone can’t figure a way to handle the situation, you are going to see Spanish yields continue to go up, and they are going to have a problem to fund themselves , ” said Jessica Hoversen, currency and fixed income analyst at MF Global in New York.