http://www.lemonde.fr/europe/article/20 ... _3214.html
The finance ministers of the European Union met, Sunday, May 9 in
Brussels, to discuss the creation of an unprecedented grant funds for
countries of the euro area in difficulty, in an attempt to stop the
contagion from a crisis that threatens foundations of monetary union.
> The German Finance Minister hospitalized
> Wolfgang Schäuble was hospitalized Sunday in Brussels, where he
> was to attend a summit Ecofin. He is under observation after
> having a new unsupported medication, according to a statement from
> his ministry. On site a spokesman for the ministry said the
> minister was "Aware" and "Was well under the circumstances".
> The Interior Minister Thomas de Maiziere, was replaced at short
> notice for talks in Brussels on Sunday.
> Schäuble, aged 67, is nailed in a wheelchair since an attack in
> 1990. He had surgery earlier this year and his scars are closing
> badly. He spent many weeks in the hospital between March and
> April, before returning recently to his position. - (With AFP)
The finance ministers of the EU convened an emergency. The leaders of
the sixteen member countries of the euro area had said Friday, after a
summit it should be a "European stabilization mechanism for
maintaining stability Financial Europe and that the fund should be
ready before the opening of markets on Monday. The device although
addressed to Member States of the euro area, must be approved by all
twenty-seven states of the Union European who bring their warranty
hence the urgent convening of all ministers EU finances.
Ministers must necessarily lead to an agreement before the opening of
financial markets in Asia in the night from Sunday to Monday to be
able to reassure investors after the Greece took in their sights Spain
Portugal or Italy.
Two options under consideration. Two permanent mechanisms for crisis
management are currently studied by ministers, according to several
European diplomatic sources quoted by Reuters. "Today it is to
validate a mechanism of extending the zone euro aid mechanism for the
balance of payments for existing countries that have not yet adopted
the euro SingleSaid one of them. "In the very short term, the
Commission would be able to raise 60 billion euros on financial
markets to establish this mechanism ", The source said, indicating
that the envelope could be used to establish a fund guarantees to
raise up to ten times that amount to come assistance to a troubled
In case of disagreement on this device, a second mechanism is also
under consideration, said another source. It would consist of
intercompany loans guaranteed by the government only countries using
the single currency.
The refusal of London. To validate the device, should be the approval
of a qualified majority of the 27 adequate European ministers who meet
in Brussels. But the subject does not without difficulty: the Britain
full transitionRefuses to participate and provide its guarantee to the
emergency fund considered. "Let's be very, very clear: if there is a
proposal to create a fund stabilization for the euro, this should be
left to countries Eurogroup "Said the British Minister of Finance,
Alistair Darling. The British were however prepared to approve a
general extension of lending possibilities of the European Union.
For its part, Sweden, which is not part of the euro area "Does not"
participate in emergency funds to bring its guarantee. Sweden's
Finance Minister, Anders BorgSaid that whilst"It is quite clear that
our taxpayers will not pay for Greeks, "We also need resources to stop
the turmoil markets."
Interdepartmental meeting at the Elysee. To cope with the financial
crisis through which the euro area, Nicolas Sarkozy convened an
interdepartmental meeting on Sunday at 18 pm 45 announced the Elysee
in a statement. The Prime Minister and the Ministers of Foreign
Affairs, Budget and European Affairs participated in the meeting
work. The Minister of Economy, Lagarde, Was represented by his chief
The French president also held talks by telephone with German
Chancellor MerkelIn the late afternoon. The two leaders "Found their
complete agreement on measures to be announced" the same day in
Brussels to stem the crisis in the euro area, announced the Elysee in
Support Barack Obama. The crisis is also an international
dimension. U.S. President Obama Sunday called on German Chancellor
Angela Merkel for the second time in three days, demanding measures
"Vigorous" EU to reassure the markets, "said White House.
The day before, Barack Obama had said "Very concerned" by the Greek
budget crisis and its impact on economies European and American in an
interview on Russian channel Rossiya. "But I think the Europeans have
realized that it was very serious. Greece takes measures very
difficult, Observed the American president. If we can stabilize the
situation in Europe, it will be good for the United States, and it
will be good also for Russia." On Friday, world stock markets had
closed down, on fears of contagion to other Greek Euro zone countries.
Meeting of central bankers. Central bankers have also begun a series
of Sunday meetings in Basel as part of a bimonthly meeting at the
headquarters of Bank for International Settlements (BIS) which should
be dominated by the crisis and the fragility of Greek euro. This
meeting of governors of the leading institutes of Issue is part of the
annual agenda of the institution considered the "Central bank of
Usually very discreet Group meeting of bankers should conclude early
Monday afternoon with a statement by its spokesman, who is also
president of the European Central Bank, Jean-Claude Trichet. A
conference organized by the International Monetary Fund (IMF) and the
Swiss National Bank (SNB) it will follow suite Tuesday this time in
Zurich. Again, problems of the euro should win at this meeting notably
orchestrated by the IMF chief, Dominique Strauss-Kahn.
John wrote:The BBC is reporting that an $80 billion aid package has been approved,
but nothing beyond that, and that therefore the markets are going to
be "very unimpressed." They have to announce something soon, before
the Asian markets open.
http://www.ft.com/cms/s/0/dcea346a-5b9e ... ab49a.html
Trichet resists political interference amid crisis
By Ralph Atkins in Frankfurt
Published: May 9 2010 20:50 | Last updated: May 9 2010 20:50
Jean-Claude Trichet faced the challenge of his career at the weekend
as he fought to preserve the independence of the European Central Bank
while simultaneously shoring up politicians’ frantic efforts to combat
the biggest crisis in the eurozone’s 11-year history.
Since becoming president of the ECB in 2003, Mr Trichet, a former
French Treasury official, has shown willingness to ignore the wishes
of government leaders, resulting in clashes – particularly with
Nicolas Sarkozy, France’s president.
As late as last Thursday, after the ECB’s governing council met in
Lisbon, Mr Trichet put the emphasis on further government action to
bring public finances under control. An ECB government bond purchasing
programme had not even been discussed, he said.
But at Friday evening’s summit in Brussels, he faced pressure,
especially from Mr Sarkozy, for the ECB to lead a collective European
response to the escalating financial crisis, according to people
familiar with the proceedings. The implication was that the ECB should
launch a programme of bond purchases.
Angela Merkel, German chancellor, backed strongly Mr Trichet’s right
not to be pushed about. Mr Trichet himself berated eurozone leaders
for letting lax fiscal and wage policies escalate the
difficulties. Still, by Saturday morning it was clear eurozone leaders
expected the ECB to play a heavy-lifting role in the days ahead.
The problem for Mr Trichet was not that the ECB might have to take
action. The ECB president boasts of the speed and flexibility with
which the bank has reacted to events of the past few years – a point
he repeated on Thursday.
Moreover, Mr Trichet knows his career will be judged largely on how
well the euro weathers the current storms. As director of the French
Treasury and then governor of the Banque de France, he was one of the
architects of Europe’s monetary union.
“He believes in the European project more than anyone else around the
table [on Friday night] and he will defend it whatever it takes,” said
Jacques Cailloux, European economist at the Royal Bank of Scotland.
The ECB president understands, too, the cost of failing to stem
financial crises. As chairman of the “Paris Club” of creditor nations
in the mid-1980s, he was closely involved in debt problems that struck
Latin America, Africa and the Middle East. “The impact on entire
continents in the emerging world – economically, and by way of
consequence in social and human terms – was profound,” he recalled
last month in a speech in Illinois.
But Mr Trichet sees the ECB’s credibility and therefore its
effectiveness depending on the principle of central bank independence,
which it inherited from the Bundesbank, Germany’s revered central
bank, on which it is largely modelled. Thus the ECB had to decide for
itself what action was necessary, in the light of actions taken by the
governments. He had also to find a consensus within the ECB’s
22-strong council, which includes the central bank governors of all 16
Last week there was resistance to a lifeline the ECB offered Greece,
when it abandoned the minimum credit rating required for Greek
government bonds used as collateral in its liquidity operations. That
broke pledges not to favour individual governments
Some on the council would fear an ECB government bond purchase might
further blur, dangerously, the boundary between monetary and fiscal
Jürgen Stark, the former Bundesbank vice-president now on the ECB’s
executive board, argued last November that such a step “would amount
to the monetisation of government debts, a sure road towards inflation
over the medium term, with adverse effects on our independence and
John wrote:Financial Times posting from a few minutes ago:
Who's going to be blamed the most: Merkel for "dithering," the UK for
not getting involved, or the ECB for remaining independent?
Users browsing this forum: Bing [Bot], Google [Bot] and 1 guest