Paul Taylor

PARIS (Reuters) – Europe has cleared more obstacles on the road to containing its sovereign debt crisis and stabilising the euro zone after Germany’s constitutional court allowed a permanent bailout fund to go ahead and the Dutch voted for pro-European parties.

Coupled with a European Central Bank decision to buy short-term bonds of states that apply for assistance and abide by strict conditions, and with EU proposals for a single euro zone banking supervisor, Wednesday’s ruling clears the way for a concerted effort to draw a line under the crisis.

However, there are still risks on the way to repairing the flawed euro construct, and Europe has yet to find a strategy to revive economic growth that would enable highly indebted states to reduce debt burdens and put the jobless back to work.

Among the bailed-out euro zone countries, Ireland is inching its way back towards the capital markets and Portugal is doggedly implementing a tough austerity programme, and has just been granted an extra year to achieve its fiscal targets.

Greece, where the crisis began, remains an exception to the general mood of cautious optimism, but talk of forcing Athens out of the euro zone has abated for now.

PARIS (Reuters) – Europe has cleared more key obstacles on the road to containing its sovereign debt crisis and stabilizing the euro zone after Germany’s constitutional court allowed a permanent bailout fund to go ahead.

Coupled with a European Central Bank decision to buy short-term bonds of states that apply for assistance and abide by strict conditions, and with EU proposals for a single euro zone banking supervisor, Wednesday’s ruling clears the way for a concerted effort to draw a line under the crisis.

However, political risks still lurk on the path to repairing the flawed euro construct, and Europe has yet to find a strategy to revive economic growth that would enable highly indebted states to reduce debt burdens and put the jobless back to work.

PARIS (Reuters) – The euro zone enters a dangerous week, strewn with potential landmines, in a somewhat more optimistic mood after investors welcomed a European Central Bank plan to prevent a breakup of the single currency.

German judges, Dutch voters, IMF inspectors and Brussels regulators could all spring surprises that make it harder to resolve a sovereign debt crisis which is almost three years old and weighing on the world economy.

Wednesday is the main day to watch.

Germany’s constitutional court rules then on the legality of the euro zone’s permanent financial rescue fund, the European Commission unveils detailed plans for a euro zone banking union, and the Netherlands holds a cliff hanger general election.

PARIS (Reuters) – European Central Bank President Mario Draghi has delivered a roadmap for rescuing the euro zone from potential meltdown but the onus is now on Spain to swallow its pride and apply for help to bring down crippling borrowing costs.

Draghi met or exceeded market expectations by announcing on Thursday that the ECB was ready to buy unlimited amounts of bonds of up to three-year maturity of countries that request a European bailout and fulfil strict policy conditions.

The Italian ECB chief asserted his authority by isolating dissent from Germany’s Bundesbank, which publicly criticised the decision, while maintaining pressure on euro zone governments to pursue budget discipline and economic reforms.

PARIS (Reuters) – European Central Bank President Mario Draghi has delivered a roadmap for rescuing the euro zone from potential meltdown but the onus is now on Spain to swallow its pride and apply for help to bring down crippling borrowing costs.

Draghi met or exceeded market expectations by announcing on Thursday that the ECB was ready to buy unlimited amounts of bonds of up to three-year maturity of countries that request a European bailout and fulfill strict policy conditions.

The Italian ECB chief asserted his authority by isolating dissent from Germany’s Bundesbank, which publicly criticized the decision, while maintaining pressure on euro zone governments to pursue budget discipline and economic reforms.

FRANKFURT/PARIS (Reuters) – The European Central Bank is thinking the unthinkable to save the euro, including resuming its controversial bond-buying program and possibly even pursuing quantitative easing – in effect printing money.

Bold action is probably at least five weeks away, insiders say, though some more clues may come when the ECB reveals its latest interest rate decision on Thursday.

Several other pieces have to fall into place before the ECB will act decisively, insiders say. These include a request for assistance from Spain, which Madrid is still resisting, a decision by euro zone leaders to let their bailout fund buy bonds at auction, and a German court ruling on the legality of the euro zone’s permanent rescue fund, due on September 12.

FRANKFURT/PARIS, July 30 (Reuters) – The European Central
Bank is thinking the unthinkable to save the euro, including
resuming its controversial bond-buying programme and possibly
even pursuing quantitative easing – in effect printing money.

Bold action is probably at least five weeks away, insiders
say, though some more clues may come when the ECB reveals its
latest interest rate decision on Thursday.

Several other pieces have to fall into place before the ECB
will act decisively, insiders say. These include a request for
assistance from Spain, which Madrid is still resisting, a
decision by euro zone leaders to let their bailout fund buy
bonds at auction, and a German court ruling on the legality of
the euro zone’s permanent rescue fund, due on Sept. 12.

PARIS (Reuters) – To understand the impact of a potential Greek exit from the euro zone, imagine an operating theatre inside a betting shop.

As surgeons prepare to amputate a gangrened foot to prevent infection spreading to healthier parts of the body, gamblers on the sidelines lay bets on which limb will be next for the chop.

Talk of a possible Greek exit has already sapped investors’ confidence in the 17-nation single currency area and contributed to higher borrowing costs for Spain and Italy. It is making a planned return to market funding next year harder for Ireland and Portugal, which are implementing tough bailout programmes.

PARIS (Reuters) – To understand the impact of a potential Greek exit from the euro zone, imagine an operating theatre inside a betting shop.

As surgeons prepare to amputate a gangrened foot to prevent infection spreading to healthier parts of the body, gamblers on the sidelines lay bets on which limb will be next for the chop.

Talk of a possible Greek exit has already sapped investors’ confidence in the 17-nation single currency area and contributed to higher borrowing costs for Spain and Italy. It is making a planned return to market funding next year harder for Ireland and Portugal, which are implementing tough bailout programs.

PARIS (Reuters) – Signs are growing that Europe’s economic and monetary union may be fragmenting faster than policymakers can repair it.

Euro zone leaders agreed in principle on June 29 to establish a joint banking supervisor for the 17-nation single currency area, based on the European Central Bank, although most of the crucial details remain to be worked out.

The proposal was a tentative first step towards a European banking union that could eventually feature a joint deposit guarantee and a bank resolution fund, to prevent bank runs or collapses sending shock waves around the continent.