Euro crisis

Olli Rehn: “We are now in the decade of fundamental reforms”

Pete Baker on December 9, 2010, 1:37 pm

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As the Irish Times notes, EU economics and monetary affairs Commissioner Olli Rehn has joined the head of the IMF in calling for “well coordinated action to safeguard stability in the euro area”. From the Irish Times Mr Rehn told the conference [in Athens] that the euro area was determined to agree thorough reform to set up a new system of economic governance. “We will not stop until we have accomplished our mission. We are now in the decade of fundamental reforms,” …

Euro crisis: “So something is afoot.”

Pete Baker on December 7, 2010, 5:17 pm

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While a furious Irish taxpayer [on the Clontarf dart] discovers just how bad it’s going to be, RTÉ notes that EU finance ministers have formally approved the €85billion bail-out for Ireland. While bond investors still appear unconvinced that the politicians have a clear strategy to restore the euro’s fortunes, there is growing political division over the best solution. Belgium, which holds the EU presidency, and which has seen its own bond yields increase, wants the €750bn fund increased. Luxembourg and Italy …

IRISH TAXPAYER (Séan): “I am really furious right now, Helmut…”

Pete Baker on November 30, 2010, 3:29 pm

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As I mentioned yesterday, the markets were distinctly unimpressed with the details of Ireland’s bail-out. The Irish Times today notes that Although banking stocks rose yesterday, global stock markets closed lower as markets failed to be convinced that the €85 billion package for Ireland would solve the euro zone debt crisis. EU economic and monetary affairs commissioner Olli Rehn said yesterday that Spain may need further austerity measures to reduce its deficit if growth was lower than forecast next year. And the paper …

The [animated] view from Taiwan

Pete Baker on November 30, 2010, 1:58 pm

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Via The Cedar Lounge Revolution. Courtesy of Next Media Animation. Pete Baker

Euro crisis: “This might be the last chance to bring stability back to the European’s financial system…”

Pete Baker on November 29, 2010, 4:43 pm

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The day after the details of Ireland’s bail-out were revealed, the BBC notes the markets’ reaction On Sunday, ministers reached agreement over a bail-out worth about 85bn euros ($113bn; £72bn). On Monday, the euro fell 0.8% to $1.3136, its lowest since 21 September. And Irish, Spanish and Portuguese bond yields remained stubbornly high, indicating the market is not convinced European debt problems have gone away. Meanwhile, major European markets were also lower in midday trade. The euro also fell against …

Details of Ireland’s €85 billion bail-out agreed

Pete Baker on November 28, 2010, 6:58 pm

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As RTÉ reports, European Union finance ministers have agreed the €85 billion bail-out for Ireland. Of the total package €35bn is to be used to support the banking system. Of that €10bn will be used immediately to inject fresh capital as a buffer against expected loan losses. The remaining €25bn will be made available as a contingency fund, effectively a massive overdraft facility, to be drawn down by the banks as and when required. And the other €50billion? The Irish …

Euro Crisis : History repeats

Mack on November 26, 2010, 1:50 pm

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The Guardian report that – the Portuguese prime minister José Sócrates insists Portugal is under no pressue from EU states to accept a euro bailout. Meanwhile After Financial Times Deutschland reported eurozone nations and the European Central Bank were urging Portugal to follow Ireland and capitulate to financial aid, the office of the Portuguese prime minister José Sócrates said it was “totally false” that the country was under such pressure. So the politicians deny any contact while financial journalists say …

Euro crisis: “The avoidance of such a meltdown must be the over-riding interest of both Ireland and Europe now”

Pete Baker on November 26, 2010, 12:14 pm

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I’m not entirely convinced that the “strongest argument against a State default has disappeared” completely, but in the Irish Times Dan O’Brien provides the rationale behind the argument against a default in the short-term It is no longer in Ireland’s narrow national interest to prevent senior bondholders from suffering the consequences of their own bad judgement. But this is very unlikely to happen, in the short term at any rate. That is so because a consensus exists among European policymakers regarding …

“It is the long term nature of this crisis that is just beginning to gain recognition.”

Pete Baker on November 23, 2010, 10:27 pm

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If there was any uncertainty about the markets’ reaction yesterday to Ireland’s bail-out, and to subsequent events, today’s plummeting Irish bank shares and more evidence of the fear of contagion in the markets should remove all doubt. The euro has hit a seven-week low against the dollar and global stock markets retreated today on fears that the Republic’s debt crisis may spread to other European countries with large budget deficits. Investors fear that Portugal and Spain may also have to seek financial help. The Spanish …

Lenihan: “if the banking problems in the country are too big for this small country to manage…”

Pete Baker on November 17, 2010, 4:23 pm

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The EU finance ministers meeting in Brussels have denied holding detailed discussions on a potential bail-out for Ireland. From the BBC report [Belgian finance minister] Didier Reynders, who chaired the talks, said the situation was not addressed because the Irish government had not requested financial help. “There’s no reason to ask all the participants for an answer because we did not receive a question,” he said. And why would they discuss it? The detailed discussions will be held tomorrow in Dublin. …

Van Rompuy: “We’re in a survival crisis”

Pete Baker on November 16, 2010, 1:49 pm

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The Irish Minister for European Affairs, Dick Roche, tells European finance ministers not to “panic“… as the EU President, Herman Van Rompuy, panics? A Guardian report indicates the extent of the concern “The Irish problem is spreading, but it could get more volatile,” said Ashok Shah, chief investment officer at London Capital, a fund management firm. “They have to get this bailout, they have a period of time before it gets impossible, before nasty things happen. The longer they leave it, …

Euro Crisis: Greece restructuring it’s debts

Mack on July 8, 2010, 11:28 am

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Fancy word for default. Spotted by John Dizard in the FT, and neatly summarised by Yves Smith on Naked Capitalism below. Greece is imposing (at least) a 19% haircut on holders of state hospital bonds. This hasn’t yet gotten the attention it merits because it’s bonds issued by particular government bodies (in this case, the Greek state hospital system) and the investors aren’t big Eurobanks but suppliers. Old outstanding coupon bonds are being replaced with zero coupon bonds. The relevant …

“Kaiser Wilhelm had a master plan for Europe…”

Pete Baker on June 24, 2010, 12:14 pm

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The Irish Times reports pointed criticism from former German Chancellor Helmut Schmidt of the recent German and French bickering in Europe. And the report notes some interesting comments from Ulrike Guérot, Berlin head of the European Council on Foreign Relations… Leading European think tanks were more critical about Mr Schmidt’s “Wilhelmine” remarks. “As much as I see his point, that Germany is being perceived in Europe in a negative way, Kaiser Wilhelm had a master plan for Europe whereas in Berlin …

Euro Crisis : Germany and Spain at war!

Mack on June 19, 2010, 2:53 pm

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Be afraid, very afraid. Zero Hedge on those German leaks to force greater Spanish austerity, and the Spanish retailation to force the publication of Euro banks stress testing. One of the more ominous news of the day came from Reuters, which reported that the previously disclosed rumor that Spain was seeking a €250 billion bail out package, had in fact originated from high-placed German officials. The move, which will could easily set off an intraeuropean cold war, was prompted by …