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Thread: Berlin, Paris vow new crisis plan as global pressure builds

  1. #1
    usa
    Location: USA
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    Default Berlin, Paris vow new crisis plan as global pressure builds

    Berlin, Paris vow new crisis plan as global pressure builds


    (Reuters) - The leaders of Germany and France have promised to unveil new measures to solve the euro zone's debt crisis by the end of the month, as international pressure builds for bold steps from Europe to avert an economic backlash of global proportions.

    German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks in Berlin on Sunday evening that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on November 3-4.

    But they declined to reveal any details of their plan. As they met, British Prime Minister David Cameron urged them to take a "big bazooka" approach to the crisis, telling the Financial Times that euro zone leaders had to break their cycle of doing "a bit too little, a bit too late."

    Merkel and Sarkozy were due to hold a working dinner after their news conference.

    "We are very conscious that France and Germany have a particular responsibility for stabilising the euro," Sarkozy said, standing next to Merkel.

    "We need to deliver a response that is sustainable and comprehensive. We have decided to provide this response by the end of the month because Europe must solve its problems by the G20 summit in Cannes."

    Financial markets were hoping the meeting of the euro zone's top two leaders would produce a breakthrough, and the lack of concrete steps could hurt sentiment on Monday.

    "It's great to see Sarkozy and Merkel talking, but they have to come up with some firm conclusions on what needs to be done," said Chris Wheeler, an analyst at Mediobanca in London.

    "The end of the month is a long way away. There has to be some clarity on what we need and it's not coming through."

    SUMMIT PRESSURE

    Sarkozy will host the Cannes summit and is keen to deliver a big success that might bolster his chances of winning re-election in a presidential vote next year.

    The French leader said he and Merkel were in "total agreement" on the recapitalisation of European banks, even though officials in Paris and Berlin have made clear in recent days that the countries are far apart.

    Foreign leaders are looking on in horror at the squabbling, fearful the euro zone crisis could plunge their own economies back into recession.

    President Barack Obama on Thursday urged Europe to "act fast," calling the crisis the largest obstacle to a recovery in the United States.

    Cameron, in an interview with the Financial Times, pressed euro zone leaders to increase the firepower of their 440 billion euro rescue fund -- the European Financial Stability Facility (EFSF) -- and to remove all uncertainty about Greece's economic future.

    The British leader said he had conveyed his concerns that the currency bloc was acting too cautiously to Merkel personally over the weekend.

    The implosion of Belgian lender Dexia, the first bank to fall victim to the two-year-old euro zone debt crisis, has added a sense of urgency to the talks.

    The prime ministers of France and Belgium and the finance minister of Luxembourg agreed a rescue plan for Dexia on Sunday.

    Other French banks have also come under intense pressure because of their exposure to Greece.

    A senior banker told Reuters in Paris that French politicians were worried that even an orderly Greek debt default could floor French banks and were pushing for action to bolster capital levels.

    Paris wants to tap the EFSF to shore up its banks, worried that pouring its own money into them could compromise its coveted triple-A credit rating.

    Officials in Berlin have made clear that they believe the fund should be used only as a last resort, when euro zone member states don't have the means to support their banks on their own.

    Another area of contention is how to use a new, enhanced EFSF to buy sovereign debt -- an issue that would become particularly crucial if Greece failed to secure a new aid tranche.

    Athens is expected to run out of cash as soon as mid-November. Inspectors from the European Commission, the IMF and the European Central Bank -- the so-called "troika" -- are currently assessing whether the country has fulfilled the criteria for more aid.

    Greece has repeatedly failed to meet fiscal targets set out for it by the troika and its economy has performed far worse than predicted.

    In addition to addressing the banks and Greece, Merkel said France and Germany were working on steps to boost economic coordination in the euro zone and said their proposals would necessitate changes to the bloc's Lisbon Treaty.

    Sarkozy made clear, however, that Europe needed to "take decisions now," rather than announce long-term plans that would take time to implement. Changing the treaty could take several years.

    "Comprehensive, sustainable and rapid responses before the end of the month. That is the result of this Franco-German meeting," he said.

    German news agency DPA, citing financial sources, reported on Sunday that euro zone finance ministers were working on scenarios involving a 60 percent reduction in Greece's debt.


    http://www.reuters.com/article/2011/...7953D520111009

    This should be good. A plan to save Greece. I can't wait to see it.


    _

  2. Icon15

    Global Economy Risks 'Lost Decade'...

    IMF chief warns of a 'lost decade' for global economy
    9 November 2011 - Christine Lagarde: "The world runs the risk of a downward spiral of uncertainty"
    The head of the International Monetary Fund, Christine Lagarde, has warned that the global economy is at risk of being plunged into a "lost decade". Ms Lagarde said the ongoing debt crisis in Europe has resulted in an uncertain outlook for the global economy. The IMF chief added that whilst efforts to solve the crisis were heading in the right direction, more needed to be done to restore confidence. Speaking in China, Ms Lagarde called upon Beijing to rebalance its economy. "Our sense is that if we do not act boldly and if we do not act together, the economy around the world runs the risk of downward spiral of uncertainty, financial instability and potential collapse of global demand," she said. "We could run the risk of what some commentators are already calling the lost decade," Ms Lagarde added.

    'Clouds on the horizon'

    Ms Lagarde's comments come amid fears that the debt crisis in some peripheral countries may be spreading to some of the euro area's biggest economies. On Tuesday, Italy's cost of borrowing hit the highest level since the euro was founded in 1999. The yield on Italian 10-year government bonds rose to 6.77%, raising concerns about its capacity to service its debts. Many investors believe that Italy may have to bailed out just like Greece, the Irish Republic and Portugal. The fear is that as the eurozone debt crisis spreads, it will have a big impact on the international economy. At the same time, there have been concerns about a slowdown in the US as it struggles to boost growth and tackle stubbornly high rates of unemployment. Ms Lagarde said the combination of these factors were a big threat to global growth. "There are clearly clouds on the horizon," she said. "Clouds on the horizon particularly in the advanced economies and particularly so in the European Union and the US."

    Domino effect

    While the US and eurozone economies have been struggling with their individual issues, Asian countries led by China have been growing robustly in recent years. However, there is a realisation that in a globalised economy, Asia is not immune from troubles in the rest of the world. The US and the eurozone are the world's two largest economic regions and are the biggest markets for Asian goods. But with their economies in the doldrums consumer demand for Asian goods has slowed. With exports being so vital to countries like China and Japan, that could really hurt growth. "Weakness in the export sector will be the main hindrance to economic growth in the coming quarters," Jing Ulrich of JP Morgan warned in a report.

    Data out earlier this month showed that China's new orders index fell to 50.5 in October from 51.3 the month before. Policymakers and analysts have warned that a slowdown in China and other emerging Asian economies coupled with troubles in the developed economies will be detrimental to global growth. Ms Lagarde called upon China to alter its export-led growth policies and boost domestic demand to rebalance its economy and sustain long term growth. She said that Beijing needed to allow its currency to appreciate further in order to boost demand at home.

    http://www.bbc.co.uk/news/business-15649985
    So here is my suggestion: Forget bombs -- we should drop Obama administration policy makers on Iraq and Syria. That would ensure the ruin of the Islamic State in no time!

  3. Default

    *sigh*

    There is no possible way to save the Euro except to kick Greece out of the Union, recapitalize the most important banks, and let the rest die and suffer through the resulting austerity, civil unrest, etc.

    If Governments fall, well that is what they get for taking on massive unsustainable debts and making promises they can't keep to their stupid people.

    The Euro elites are doing everything they can to maintain an unsustainable status quo in some strange hopes that the economy will just magically turn around, when it is not. Welcome to the "new normal" where quality of life will be lowered in Europe and America, to raise the quality of life in Asia and Africa.

    Globalization is going to slowly equalize the quality of lives around the world with a significant drop in the quality of life of the 1st world and a significant raising of the quality of life in developing nations.
    Last edited by SiliconMagician; Nov 10 2011 at 01:07 AM.

  4. Icon15

    Granny says, "Dat's right - the sky's fallin', the whole world gonna go broke...

    IMF's Christine Lagarde warns of '1930s moment'
    23 January 2012 - Christine Lagarde was speaking ahead of Wednesday's Davos summit
    IMF chief Christine Lagarde has warned the world faces an economic spiral reminiscent of the 1930s unless action is taken on the eurozone crisis. Ms Lagarde, speaking in Berlin, warned of a danger of rising unemployment if governments did not act together. She said the Fund needed 500bn euros more to help sustain those countries worst hit by the eurozone crisis. She added that Germany's economy depended on the economic health of its customers in other eurozone countries. Ms Lagarde, who met German Chancellor Angela Merkel, said that the eurozone needed a "larger firewall" to prevent the debt crisis spreading.

    'Downward spiral'

    Talks between Greece and its creditors were adjourned on Friday amid Greek hopes a large chunk of its debts could be written off. In a BBC interview, Ms Lagarde said now was the time to act in order to avoid a 1930s-style depression. She said: "Looking at it from this perspective, 2012 must be a year of healing. But as Hippocrates put it long ago: 'Healing is a matter of time, but it is sometimes also a matter of opportunity.' "And today, it has to be an opportunity of our own making. Otherwise, we could easily slide into a 1930s moment. "A moment where trust and co-operation break down and countries turn inward. A moment, ultimately, leading to a downward spiral that could engulf the entire world."

    Hopes for success

    To spur growth, she called indirectly on the European Central Bank to lower interest rate. With inflation falling sharply, "additional and timely monetary easing will be important," she said. However, she added that there was still a chance of a resolution to the crisis. She said: "I remain ever hopeful. I believe we can avoid such a scenario and I say this for a simple reason: we know what must be done. "Although the economic outlook remains deeply worrisome, there is a way out. Now the world must find the political will, the collective will, to do what it knows must be done."

    http://www.bbc.co.uk/news/business-16689211
    So here is my suggestion: Forget bombs -- we should drop Obama administration policy makers on Iraq and Syria. That would ensure the ruin of the Islamic State in no time!

  5. Red face

    Greece gonna default anyway?...

    Moody's warns of Greece default despite debt deal
    2 March 2012 - Austerity measures have prompted mass demonstrations in Greece
    Moody's has cut Greece's credit rating again, citing a risk of default despite a recent debt write-off deal. Moody's cut Greece's rating to "C" from "Ca", the lowest level on its scale. The firm said on Friday: "Today's rating decision was prompted by the recently announced debt exchange proposals for Greece, which imply expected losses to investors in excess of 70%."

    The deal writes off 107bn euros ($141.3bn; 89bn) of Greece's debt. Moody's said the planned debt exchange, which involves private investors of Greek debt writing off much of the 206bn euros in Greek bonds they hold, "would constitute a distressed exchange, and hence a default".

    The agency acknowledged that the deal was necessary to help stabilise Greece. But Moody's said: "The risk of a default even after the debt exchange has been completed remains high. Moody's believes that Greece will still face medium-term solvency challenges. "The country is unlikely to be able to access the private market once the second assistance package runs out; and its planned fiscal and economic reforms will still face very significant implementation risks." Earlier this week the Standard & Poor's agency classified Greek debt as in "selective default".

    http://www.bbc.co.uk/news/business-17238523
    So here is my suggestion: Forget bombs -- we should drop Obama administration policy makers on Iraq and Syria. That would ensure the ruin of the Islamic State in no time!

  6. #6

    Default

    Quote Originally Posted by DonGlock26 View Post
    Berlin, Paris vow new crisis plan as global pressure builds


    (Reuters) - The leaders of Germany and France have promised to unveil new measures to solve the euro zone's debt crisis by the end of the month, as international pressure builds for bold steps from Europe to avert an economic backlash of global proportions.

    German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks in Berlin on Sunday evening that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on November 3-4.

    But they declined to reveal any details of their plan. As they met, British Prime Minister David Cameron urged them to take a "big bazooka" approach to the crisis, telling the Financial Times that euro zone leaders had to break their cycle of doing "a bit too little, a bit too late."

    Merkel and Sarkozy were due to hold a working dinner after their news conference.

    "We are very conscious that France and Germany have a particular responsibility for stabilising the euro," Sarkozy said, standing next to Merkel.

    "We need to deliver a response that is sustainable and comprehensive. We have decided to provide this response by the end of the month because Europe must solve its problems by the G20 summit in Cannes."

    Financial markets were hoping the meeting of the euro zone's top two leaders would produce a breakthrough, and the lack of concrete steps could hurt sentiment on Monday.

    "It's great to see Sarkozy and Merkel talking, but they have to come up with some firm conclusions on what needs to be done," said Chris Wheeler, an analyst at Mediobanca in London.

    "The end of the month is a long way away. There has to be some clarity on what we need and it's not coming through."

    SUMMIT PRESSURE

    Sarkozy will host the Cannes summit and is keen to deliver a big success that might bolster his chances of winning re-election in a presidential vote next year.

    The French leader said he and Merkel were in "total agreement" on the recapitalisation of European banks, even though officials in Paris and Berlin have made clear in recent days that the countries are far apart.

    Foreign leaders are looking on in horror at the squabbling, fearful the euro zone crisis could plunge their own economies back into recession.

    President Barack Obama on Thursday urged Europe to "act fast," calling the crisis the largest obstacle to a recovery in the United States.

    Cameron, in an interview with the Financial Times, pressed euro zone leaders to increase the firepower of their 440 billion euro rescue fund -- the European Financial Stability Facility (EFSF) -- and to remove all uncertainty about Greece's economic future.

    The British leader said he had conveyed his concerns that the currency bloc was acting too cautiously to Merkel personally over the weekend.

    The implosion of Belgian lender Dexia, the first bank to fall victim to the two-year-old euro zone debt crisis, has added a sense of urgency to the talks.

    The prime ministers of France and Belgium and the finance minister of Luxembourg agreed a rescue plan for Dexia on Sunday.

    Other French banks have also come under intense pressure because of their exposure to Greece.

    A senior banker told Reuters in Paris that French politicians were worried that even an orderly Greek debt default could floor French banks and were pushing for action to bolster capital levels.

    Paris wants to tap the EFSF to shore up its banks, worried that pouring its own money into them could compromise its coveted triple-A credit rating.

    Officials in Berlin have made clear that they believe the fund should be used only as a last resort, when euro zone member states don't have the means to support their banks on their own.

    Another area of contention is how to use a new, enhanced EFSF to buy sovereign debt -- an issue that would become particularly crucial if Greece failed to secure a new aid tranche.

    Athens is expected to run out of cash as soon as mid-November. Inspectors from the European Commission, the IMF and the European Central Bank -- the so-called "troika" -- are currently assessing whether the country has fulfilled the criteria for more aid.

    Greece has repeatedly failed to meet fiscal targets set out for it by the troika and its economy has performed far worse than predicted.

    In addition to addressing the banks and Greece, Merkel said France and Germany were working on steps to boost economic coordination in the euro zone and said their proposals would necessitate changes to the bloc's Lisbon Treaty.

    Sarkozy made clear, however, that Europe needed to "take decisions now," rather than announce long-term plans that would take time to implement. Changing the treaty could take several years.

    "Comprehensive, sustainable and rapid responses before the end of the month. That is the result of this Franco-German meeting," he said.

    German news agency DPA, citing financial sources, reported on Sunday that euro zone finance ministers were working on scenarios involving a 60 percent reduction in Greece's debt.


    http://www.reuters.com/article/2011/...7953D520111009

    This should be good. A plan to save Greece. I can't wait to see it.


    _
    Blitzkreig Libya's oil fields? All worked out in advance, France will send troops to protect Libya from Germany. At the sight of the first German making a mean face the French will surrender and convince the Libyan's to do the same. Germany will take over and secretly share the oil with France.
    Last edited by Professor Peabody; Mar 05 2012 at 01:49 AM.
    Obama Care AKA - The Affordable Care Act/ACA = Any Care is Accidental

  7. Default

    Without unified fiscal policy, unified money is impossible.

    Right now, people in southern Europe get a free ride at the expense of the Germans.

    The Germans have had all of that they can take.

    The euro is toast.
    ObamaTax Delendum Est

  8. #8
    usa
    Location: USA
    Posts: 47,176
    Blog Entries: 2
    My Latest Mood: Yeehaw

    Default

    The EU still hasn't fixed Greece. The issue is in doubt.

    _

  9. Default

    You mean more bailouts for the bailouts of the previous bailouts? Keynesian policies are wonderful arent they? Its not that the bailouts failed its they are not big enough!

    Or perhaps Greece didnt spend enough to get themselves back on track!
    Last edited by RP12; Mar 05 2012 at 04:58 AM.

  10. Default

    Quote Originally Posted by Taxcutter View Post
    Without unified fiscal policy, unified money is impossible.

    Right now, people in southern Europe get a free ride at the expense of the Germans.

    The Germans have had all of that they can take.

    The euro is toast.
    Nah.. the Huns didn't want it anyway. But they didn't like the idea of continued separation from their brethren in East Germany and the Frankish hordes thought they finally had the means to hold the Huns hostage by accepting reunification in return for joining the EU.

    Didn't work out that way though did it? LMAO
    Last edited by SiliconMagician; Mar 05 2012 at 04:59 AM.

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