Euro crisis – Page 7 – Slugger O'Toole

“Now there’s the healthy option of simply getting on with the neighbours.”

Pete Baker on May 21, 2011, 11:12 pm

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In contrast to John’s northern cynicism, in the Irish Times Fintan O’Toole is optimism personified on the impact of the visit of Queen Elizabeth II to Ireland [Keep the noise down in the attic, please – Ed]. Indeed. From the Irish Times article The combination of all of these factors made the visit an oddly liberating occasion. No one would have thought that the British queen could free Ireland, but she did help to free us from the crippling insecurities of …

Euro crisis: “When it becomes serious, you have to lie.”?

Pete Baker on May 19, 2011, 3:55 pm

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Another article, to add to those noted by Mick, on the wider economic and political considerations being argued in the eurozone. At the Guardian, Nuno Monteiro and Eduardo Sousa warn While a growing number of analysts recognise the likelihood of sovereign-debt defaults across Europe’s periphery in the next few years, the continent’s political and financial elites continue to see restructuring as the third rail of financial options. Despite all signs that the euro may be set on an implosion course, the EU …

Euro crisis: “It would raise incredible doubts about our credibility if we simply were to change the rules…”

Pete Baker on May 17, 2011, 3:45 pm

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With EU finance ministers pondering the future for Greece, and European officials publicly disagreeing on the possiblity of the rescheduling/restructuring of sovereign debt, Frau Bundeskanzerlin has decreed that there will be no sovereign default in the euro zone before 2013. As ministers prepared to tackle the increasingly precarious financial situation in Greece, Dr Merkel made clear her resistance to any debt restructuring by the country. Addressing students in Berlin, Dr Merkel said private sovereign creditors should not bear losses until …

Euro crisis: “This requires a political as well as an economic understanding of the dynamics in play at European and national levels”

Pete Baker on May 14, 2011, 8:57 pm

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In identifying three alternative European solutions, rather than the “lethal injection” of unilateral action by Ireland, Paul Gillespie in the Irish Times highlights the wider issues in play. IRELAND BADLY needs a strategy to handle the euro zone crisis, rather than reacting defensively to all its latest twists and turns. This requires a political as well as an economic understanding of the dynamics in play at European and national levels. Most economists here are ill-equipped to provide this because they take …

EU crisis: “the question is whether all this can be kept under control.”

Pete Baker on May 13, 2011, 9:13 pm

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EU leaders will discuss the proposed revision of the Schengen agreement at a summit next month, as prompted by France and Italy – although the Guardian reported that, at a meeting of EU interior ministers, “15 of the 22 EU states which had signed up to Schengen supported the move, with only four resisting”. Meanwhile, the European Commission President, José Manuel Barroso, has written a strongly worded letter to the Danish prime minister, Lars Lokke Rasmussen, warning against the Danish Government’s proposals to unilaterally re-introduce …

Robert Peston: “it will be squeaky bum time in government buildings all over Europe.”

Pete Baker on May 11, 2011, 2:54 pm

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The BBC’s business editor, and still everyone’s hero, Robert Peston, identifies the reasons why Europe continues to prescribe medication, rather than opting for untested, and risky, surgery. At least for now. From the Peston’s Picks blog There seem to be three reasons. First, in Germany, it is apparently politically more acceptable to provide rescue finance to Greece directly than to rescue German banks that foolishly and greedily bought Greek debt for its relatively high yield. Second, a Greek debt restructuring would …

Euro crisis: “This is Europe’s awful dilemma. The patient is the euro.”

Pete Baker on May 10, 2011, 3:47 pm

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Taoiseach Enda Kenny has warned that Dr Doom Morgan Kelly’s prescription for Ireland would deliver “a lethal injection to the Irish economy“. At the Guardian’s Ireland Business blog, Stephen Kinsella, in part one of a two-part post, identifies some of the implications of “an immediate balancing of the books”. The fiscal problem is pretty clear. There is a big gap between what Ireland spends, and what she makes. Including promissory notes, the Irish government has been taking in roughly €53.3bn and spending …

Euro crisis: “The “European project” won’t go quietly into the night…”

Pete Baker on May 9, 2011, 3:03 pm

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Whilst the Irish Government waits for “the right time” to play whatever cards they think they have, Greece is still in the vanguard of the PIGS. As the BBC Europe editor, Gavin Hewitt, points out To the issue that caused a tremor in the markets on Friday: that Greece may opt to leave the euro. It has been met with fierce denials. For the moment it seems a highly unlikely option. And yet in German circles it is being discussed. In …

Euro crisis: “the EU is setting itself up for failure”

Pete Baker on April 26, 2011, 4:06 pm

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In a lengthy article posted at Crooked Timber, John Quiggin and Henry Farrell argue that By concentrating on its economic problems but ignoring their political consequences, the EU is setting itself up for failure. The case for austerity does not make sense. And if the EU fails to deal with the political fallout of its own institutional weaknesses, it is going to collapse. No political body can force voters to repeatedly shoulder the costs of adjustment on their own and expect …

Finland goes to the polls

Pete Baker on April 17, 2011, 6:47 pm

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Finland’s general election today represents one of those domestic political pressures, in Ireland and elsewhere, I mentioned which could have much wider ramifications. As RTÉ reports The reason the outcome of this election is being watched so closely is that Finland’s parliament has the right to vote on EU bailouts, such as the one currently being negotiated between Portugal and EU and IMF officials. And as EU rules state that any bailout must be approved unanimously by all 17 eurozone members, …

“What is clear is that Dublin’s perspective will not be the defining one.”

Pete Baker on April 5, 2011, 4:44 pm

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In his Irish Times European Diary Arthur Beesley sketches out the domestic political pressures elsewhere which may hinder the Irish Government’s attempt to renegotiate the terms of their bail-out. From the Irish Times article In Portugal, fellow socialist Jose Socrates talked himself into an early election a few weeks ago by failing to win support for a new austerity drive. The country is said to be in a funk of despair over the prospects of a bailout. Look northwards from Spain …

Euro crisis: “The fix is not in. A line has not been drawn. And tensions are rising.”

Pete Baker on March 25, 2011, 7:59 pm

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What to make of the news emerging at the end of the two-day EU summit in Brussels? It depends. The RTÉ report tells us The EU is battling to stem a debt crisis that has raged for over a year and led Ireland and Greece to accept bailouts. It had promised to unveil a comprehensive solution at this summit that it hoped would reassure jittery markets. But the abrupt resignation of Portuguese Prime Minister Jose Socrates on the eve of …

Euro crisis: “If Portugal asks, we will be ready to intervene…”

Pete Baker on March 24, 2011, 6:59 pm

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To the apparent outrage of some, last night Taoiseach Enda Kenny agreed to defer seeking a conclusion to talks on reducing Ireland’s bail-out interest rate at the two-day EU summit in Brussels. At the IIEA blog, Karl Whelan argued After a lot of fighting talk about renegotiation during the recent election campaign, the new Irish leader Enda Kenny probably feels a certain amount of pressure to come home from this summit with a deal on the interest rate. My advice, for what …

Euro crisis: Frau Bundeskanzlerin answers history’s knock

Pete Baker on January 20, 2011, 1:38 pm

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History has been knocking for some time… and, for good or ill, Angela Merkel “is perceived to set policy, pace and tone at every turn.” But has the public been softened up sufficiently for historic change? In the Irish Times Derek Scally reports from Berlin In recent off-the-record briefings, the German leader has shown an unusual determination for the task she has set herself. She wants “real harmonisation”, not just “closer co-ordination”. After months of silent backing for her euro zone strategy, leaders in Scandinavia …

Euro crisis: “Slowly the public is being softened up for historic change.”

Pete Baker on January 17, 2011, 5:29 pm

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While the euro crisis rumbles on, and with Frau Bundeskanzlerin promising that “We will do what is necessary, everything else will be discussed step by step”, the BBC’s Europe editor, Gavin Hewitt, wonders “what democracy in Europe means”… If the eurozone group of countries heads towards fiscal union then a further question will surely follow. Can you have fiscal union without political union? Slowly the public is being softened up for historic change. President Sarkozy was not a lone voice when he …

Angela Merkel: “We will do what is necessary, everything else will be discussed step by step”

Pete Baker on January 12, 2011, 6:44 pm

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Eastern promises aside – and isn’t there something about beware [metaphorical] Greeks bearing gifts? – Portugal’s visit to those reluctant bond markets is described as “successful” by this Reuters report at the Irish Times – €1.25 billion raised with the ten year yield kept below 7%. But as the BBC report points out Bond buying by the European Central Bank (ECB) had helped keep the yield below 7%. “Probably the most important thing for the 10-year yield is that the 7% level …

Eastern promises

Mack on January 12, 2011, 11:10 am

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It would appear that our Asian friends have confidence (and an interest) in the survival of the European project. Japan and China will help fund the European Financial Stability Fund that will be used to bailout European banks, sorry, I mean Ireland. With Japan pledging to buy 20% or more of the bonds that will be sold later this month. From Bloomberg – There is a plan for the euro zone to jointly issue a large amount of bonds late …

“the euro crisis had a Christmas break, but it’s back”

Pete Baker on January 10, 2011, 2:03 pm

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With Portugal heading back to an increasingly reluctant bond market, the BBC’s Europe editor, Gavin Hewitt, notes that “White knuckles have re-emerged in Brussels and other vulnerable European capitals.” Sometimes in Brussels I detect that the fight is less to save Portugal but more to ring-fence Spain. It’s the fourth-largest economy in the eurozone. If it needed rescuing the funds currently are probably not there. And then awkward questions would have to be asked – including whether Germans, in those …

Euro crisis: “For good or ill, she is perceived to set policy, pace and tone at every turn.”

Pete Baker on December 28, 2010, 9:06 pm

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In the Irish Times Arthur Beesley’s assessment of the “mammoth task” European leaders face in the year ahead is well worth a read. From the Irish Times article Strain and anxiety were everywhere in 2010. Merkel held the line against easy bailouts but her dogged intransigence on core principles led to accusations that she was making matters worse, not least in Ireland. From the summit room came whispered reports of shouting matches between French president Nicolas Sarkozy and ECB chief …

Angela Merkel: “now we need more in common in our economic policies…”

Pete Baker on December 19, 2010, 4:00 pm

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EU leaders met in Brussels last week, for their last summit of 2010, and agreed the text of a “narrow revision” to the Lisbon Treaty – the conclusions of the European Council (16-17 December 2010) [pdf file]. In Taoiseach Brian Cowen’s view, “There isn’t a change of competence or a transfer of competence, so our strong view is that it is compatible with the Constitution.” That would be without the need for a referendum. And from the same Irish Times …