Opinion

Paul Taylor

G7 gives first sign ready to battle crisis

Paul Taylor
Aug 8, 2011 00:27 UTC

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.

Any statement would be timed to precede the opening of trading in Tokyo, the first major market to open on Monday, at 9 a.m. local time (0000 GMT/8:00 p.m. EDT Sunday).

ECB President Jean-Claude Trichet said in a statement after discussions with his Governing Council on Sunday that the central bank welcomes new steps taken by Italy and Spain on fiscal and structural reforms, and hence it would “actively implement” its bond-buying program. A monetary source said this means it is ready to start buying up the debt of these two countries.

ECB to buy Italian, Spanish bonds to stop contagion

Paul Taylor
Aug 7, 2011 20:48 UTC

BERLIN/PARIS (Reuters) – The European Central Bank will intervene decisively on markets to protect Italy and Spain from an accelerating debt crisis, a monetary source said on Sunday, indicating it would buy government bonds of the euro zone’s third and fourth biggest economies.

The agreement of the bank’s policy-making Governing Council marked a watershed in the ECB’s fire-fighting after modest bond buying efforts last week failed to stem contagion to the currency bloc’s larger economies.

Officials on an ECB conference call carefully considered the situation in Italy and Spain, and took note of a statement by France and Germany on Sunday stressing their commitment to European financial reforms, the source said.

RPT_WRAPUP 6-ECB eyes decision on Italy bond buys to ease debt

Paul Taylor
Aug 7, 2011 19:54 UTC

FRANKFURT/PARIS, Aug 7 (Reuters) – The European Central
Bank faced a decision on Sunday whether to buy Italian bonds to
try to prevent the euro zone debt crisis from widening, while
global policymakers conferred on the twin financial crises in
Europe and the United States.

After a week that saw $2.5 trillion wiped off world stock
markets, political leaders are under searing pressure to
reassure investors that Western governments have both the will
and ability to reduce their huge and growing public debt loads.

ECB President Jean-Claude Trichet wants the policy-setting
Governing Council to take a final decision on buying Italian
paper after Prime Minister Silvio Berlusconi announced new
measures on Friday to speed up deficit reduction and hasten
economic reforms, one ECB source said. [ID:nL6E7J704K]

ECB eyes decision on Italy bond purchase to ease debt

Paul Taylor
Aug 7, 2011 11:49 UTC

FRANKFURT/PARIS (Reuters) – The European Central Bank will decide on Sunday evening whether to buy Italian government bonds to try to speed up cuts in euro zone debt, ECB sources said as global leaders conferred by phone on the twin financial crises in Europe and the United States.

After a week that saw $2.5 trillion wiped off global stock markets, political leaders are under pressure to reassure investors that Western governments have both the will and ability to reduce their huge and growing public debt loads.

ECB President Jean-Claude Trichet wants the policy-setting Governing Council to take a final decision on buying Italian paper after Prime Minister Silvio Berlusconi announced new measures on Friday to speed up deficit reduction and hasten economic reforms, one ECB source said.

ECB eyes decision on Italy bond purchase to ease debt crisis

Paul Taylor
Aug 7, 2011 11:39 UTC

FRANKFURT/PARIS, Aug 7 (Reuters) – The European Central
Bank will decide on Sunday evening whether to buy Italian
government bonds to try to speed up cuts in euro zone debt, ECB
sources said as global leaders conferred by phone on the twin
financial crises in Europe and the United States.

After a week that saw $2.5 trillion wiped off global stock
markets, political leaders are under pressure to reassure
investors that Western governments have both the will and
ability to reduce their huge and growing public debt loads.

ECB President Jean-Claude Trichet wants the
policy-setting Governing Council to take a final decision on
buying Italian paper after Prime Minister Silvio Berlusconi
announced new measures on Friday to speed up deficit reduction
and hasten economic reforms, one ECB source said.

Trichet wants ECB decision on Italy – source

Paul Taylor
Aug 7, 2011 11:06 UTC

FRANKFURT/PARIS, Aug 7 (Reuters) – The European Central Bank
will decide whether to buy Italian government bonds to try to
stem the euro zone’s debt crisis from widening in a crucial
conference call on Sunday evening (1700 GMT), ECB sources said.

ECB President Jean-Claude Trichet wants the policy-setting
Governing Council to take a final decision on buying Italian
paper after Prime Minister Silvio Berlusconi announced new
measures on Friday to speed up deficit reduction and hasten
economic reforms, one source said.

Another source said the council would also discuss possible
emergency liquidity measures to prevent money markets freezing.

World leaders to confer on debt crises this weekend

Paul Taylor
Aug 6, 2011 18:48 UTC

PARIS/SHANGHAI, Aug 6 (Reuters) – Global leaders on
Saturday arranged a round of emergency calls to discuss the
twin debt crises in Europe and the United States that are
causing turmoil in financial markets.

The European Central Bank’s policy-setting council will
hold a rare Sunday conference call to talk about the euro zone
problems, ECB sources said.

Markets are anxiously looking for the central bank to start
buying Italian and Spanish debt on Monday to stabilize prices,
a move that has split the ECB governing council.

Exclusive: ECB to discuss crisis action on Sunday: sources

Paul Taylor
Aug 6, 2011 17:00 UTC

PARIS (Reuters) – The European Central Bank will hold a rare Sunday conference call to discuss developments in the euro zone’s debt crisis and the possibility of buying Italian sovereign bonds, ECB sources said Saturday.

The sources said the central bank’s Governing Council remains divided over whether to buy Italian bonds and even some of those who favor the move say Italy should do more to front-load austerity measures first.

Three sources said ECB President Jean-Claude Trichet has called a teleconference of the policy-setting council for Sunday afternoon to discuss the continuing turmoil on financial markets and how to respond to Italy’s latest reform pledges.

Van Rompuy may get top euro zone role -sources

Paul Taylor
Aug 2, 2011 16:35 UTC

BRUSSELS/PARIS, Aug 2 (Reuters) – European Council President
Herman Van Rompuy may get an enlarged role as coordinator and
spokesman for the euro in an effort to impose greater policy
discipline in the single currency area, EU sources say.

France and Germany are to make proposals on strengthening
euro zone governance later this month and the executive European
Commission is also working on ideas to put to an EU summit in
October.

The French daily Le Monde reported in its weekend edition
that President Nicolas Sarkozy was among those pressing for Van
Rompuy to be given more power in the management of the 17-nation
euro zone. French officials did not respond to requests for
comment.

Conflicting statements cast doubt on euro zone deal

Paul Taylor
Jul 27, 2011 11:27 UTC

PARIS, July 27 (Reuters) – Contrasting statements by euro
zone politicians to domestic audiences have underlined the
fragility of last week’s deal to rescue Greece and unsettled
financial markets already on edge because of the U.S. debt
impasse.

Greek Prime Minister George Papandreou told lawmakers from
his Pasok socialist party on Wednesday that debt-stricken Athens
will effectively receive the first joint eurobonds in the form
of loans at close to cost price from the euro zone’s rescue
fund.

“The decision of our European partners to lend us at 3.5
percent, an interest rate just above the one at which Germany
itself is borrowing, is in essence tantamount to introducing a
European bond, regardless of the fact that this system has not
been completed yet,” he said.

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