Paul Taylor

PARIS, Sept 12 (Reuters) – Growing fears of a Greek default
sent a hurricane through heavily exposed French banks on Monday
and hit the euro as investor confidence in the European currency
area’s ability to surmount a sovereign debt crisis ebbed.

Shares in Societe Generale , BNP Paribas
and Credit Agricole slumped by more than 10 percent
amid expectations of an imminent downgrade by credit ratings
agency Moody’s, due largely to their exposure to Greek bonds.

The shock resignation of European Central Bank chief
economist Juergen Stark last Friday, and weekend comments by
German politicians suggesting Athens may have to default and be
“suspended” from the euro zone, drove the euro to a
10-year low against the yen and a 7-month low against the
dollar.

The storm forced SocGen, the hardest hit French lender in
recent weeks, to announce further drastic measures it denied
only last week were under consideration, speeding up asset
disposals and deepening cost cuts.

SocGen shares are now trading at a historic low of 15.55
euros, after losing more than two-thirds in seven months. Since
mid-2007 the bank has seen 52 billion euros ($71.3 bln) wiped
off its market value, which today stands at 13.5 billion –
smaller than spirits group Pernod Ricard or fashion
house Christian Dior .

PARIS (Reuters) – The resignation of the top German official at the European Central Bank could hardly have come at a worse time for euro zone policymakers as they grope for a way out of the deepest crisis in the single currency’s 12-year history.

The ECB is the one institution that has kept the euro zone afloat in the sovereign debt crisis and prevented a bond market meltdown. The European Union has no federal government or common fiscal authority and speaks with many dissonant voices.

Juergen Stark’s departure from the ECB’s Executive Board in despair at the policy of buying government bonds to prevent the crisis spreading comes as policymakers in Berlin and beyond are preparing for the growing possibility of a Greek default.

PARIS (Reuters) – The resignation of the top German official at the European Central Bank could hardly have come at a worse time for euro zone policymakers as they grope for a way out of the deepest crisis in the single currency’s 12-year history.

The ECB is the one institution that has kept the euro zone afloat in the sovereign debt crisis and prevented a bond market meltdown. The European Union has no federal government or common fiscal authority and speaks with many dissonant voices.

Juergen Stark’s departure from the ECB’s Executive Board in despair at the policy of buying government bonds to prevent the crisis spreading comes as policymakers in Berlin and beyond are preparing for the growing possibility of a Greek default.

PARIS (Reuters) – It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.

As jitters over Paris’ prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France’s plight.

The sight of the euro zone’s number two economy buffeted by rumours and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.

PARIS (Reuters) – It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.

As jitters over Paris’ prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France’s plight.

The sight of the euro zone’s number two economy buffeted by rumors and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.

PARIS, Aug 9 (Reuters) – The euro zone’s financial rescue
fund seems set to win parliamentary approval by mid-October for
expanded powers to help member states in difficulty despite
mounting hostility in northern Europe towards further bailouts.

A Reuters survey suggests new rules allowing
the European Financial Stability Facility to buy bonds on the
secondary market and give precautionary credit lines to
countries before they are shut out of credit markets face few
obstacles in national legislatures with vocal Eurosceptical
minorities.

Goverments in Germany, Austria, Finland, the Netherlands and
Slovakia say they are confident their parliaments will approve a
July 21 agreement by euro zone leaders to widen the scope of the
440-billion-euro EFSF when they resume business in the coming
weeks.

SYDNEY/PARIS, Aug 8 (Reuters) – The European Central Bank
stepped into bond markets on Monday, backing up a pledge to
support Spain and Italy with the aim of averting financial
meltdown in the euro zone, while the G7 and G20 offered soothing
words to investors shaken by a historic downgrade of the U.S.
debt rating.

Spanish and Italian bond yields fell as traders said the ECB
was broadening its bond-buying programme to include debt issued
by the bloc’s third- and fourth-biggest economies, in the latest
effort to staunch Europe’s sovereign debt crisis.

“They’re doing 20 to 25 million (euro) clips and they’re
spreading it around the market,” said a trader. “We expect them
to do billions today.”

SYDNEY/PARIS, Aug 8 (Reuters) – The European Central Bank
stepped into bond markets on Monday, backing up a pledge to
support Spain and Italy with the aim of averting financial
meltdown in the euro zone, while the G7 and G20 offered soothing
words to investors shaken by a historic downgrade of the U.S.
debt rating.

Spanish and Italian bond yields fell as traders said the ECB
was broadening its bond-buying programme to include debt issued
by the bloc’s third- and fourth-biggest economies, in the latest
effort to staunch Europe’s sovereign debt crisis.

“They’re doing 20 to 25 million (euro) clips and they’re
spreading it around the market,” said a trader. “We expect them
to do billions today.”

PARIS (Reuters) – The European Central Bank waved its big fire hose at blazing bond markets, then turned on a puny sprinkler.

Unsurprisingly, the fire refused to go out. Indeed, the flames grew higher, licking the feet of Italy and Spain, the currency area’s third and fourth largest economies.

Three days later, the bank’s governing council decided in an emergency Sunday night conference call to change course abruptly and resort to the big fire hose after all.

FRANKFURT/PARIS (Reuters) – Political and financial leaders gave their first sign of readiness to battle a debt crisis gone global when the European Central Bank signaled on Sunday it would start buying Italian and Spanish debt, a critical move to quell a bond rout that has rocked financial markets.

The European Central Bank decision would be aimed at calming markets grown increasingly doubtful about Europe’s ability to deal with its debt issues, a strikingly parallel concern to that which led ratings agency Standard & Poor’s to knock U.S. debt down from “risk free” AAA status to AA-plus.

Meanwhile, finance chiefs from Group of Seven industrial nations were to confer by telephone late on Sunday– and possibly issue a statement afterward — to try to soothe anxious investors after a week in which $2.5 trillion of market value was wiped out.