Monday, 13 October 2008

Blog : EU in the Eye of the Storm 13th October

IMF To Step In With Rescue Package For Hungary. Edward Hugh, A Fistful of Euros (en)
" ... Hungary has been hit hard by the global financial crisis since it has one of the most fragile economies in Europe due to the earlier high budget and current account deficits, its rapidly ageing and steadily declining population and the heavy ongoing reliance on external financing ... "

Europe’s Leaders Agree To A Common Front In Fighting The Banking Crisis. Edward Hugh, The Fistful of Euros (en)
" ... course Brown himself has been relishing it all, proudly proclaining that Briatain will “lead the way” out of the credit crunch, and adding in true Churchilian style that “I’ve seen in the cities and towns I’ve visited a calm, determined British spirit; that, while this is a world financial crisis that has started from America, Britain will lead the way in pulling through.”
Well, we will see ...
... So government finances will guarantee the banks, but who will guarantee the government finances? This, at this stage may seem to be an idle question, since none are under direct threat, but I think we need to be clear here, the money which will now need to be spent ... will have to come from somewhere, and by and large this will mean the national governments issuing debt, but if we come to individual national governments like Greece or Italy - where debt to GDP ratios are already over 100% - it is not clear how much paper they can actually issue without seeing what is know as the “spread” on their bonds increasing significantly ... "

La crise financière pousse les feux du gouvernement économique européen. Jean Quatermer, Les Coulisses de Bruxelles (fr)
" ... Durant la campagne présidentielle et au début de son mandat, le Président de la République avait réclamé l’institutionnalisation d’un Eurosommet arguant que la gouvernance économique de la zone euro ne pouvait pas être laissée aux seuls ministres des Finances et qu’il était nécessaire pour faire contrepoids à la Banque centrale européenne (BCE). C’est précisément la raison qui a motivé l’opposition allemande qui y a vu un risque de remise en cause de la sacro-sainte indépendance de l’Institut d’émission de Francfort ...
... L’Allemagne, qui s’est opposée à toute action européenne de peur d’être amenée à payer pour les autres, ne peut que constater l’échec des politiques nationales. Selon le Canard Enchainé de cette semaine, Sarkozy aurait raconté ainsi la réunion du G4 à ses conseillers : « Elle a dit : ‘chacun sa merde’ » ! ...
... Nicolas Sarkozy s’est entretenu aujourd’hui avec la chancelière allemande. Elle a confirmé, à l’issue de cette rencontre -qui a eu lieu à Colombey-les-Deux-Eglises-, que l’Allemagne avait renoncé à défendre le chacun-pour-soi : « nous sommes sur une voie commune pour mettre en place une réaction concertée et cohérente de la zone euro à la crise financière internationale ». Elle a assuré que l’Eurosommet produira une « réponse claire » pour les marchés financiers ...

Cracks beginning to show? Richard, EUReferendum (en)
" ... In fact, at least one financial blogger is more than a little sour, warning that "there is a price to pay for those government guarantees." Blanket guarantees of everything, he writes, will eventually end in a collapse of some major country or some major currency, the break-up of the EU, or a global depression of some sort, perhaps all of the above.

Plagues Of The West. Eurosoc 2, EuroSoc (en)
" ... The New Ice Age, AIDS, Global Warming, Mad Cow Disease, Millennium Bug, Terrorism, Bio-Terror, Avian Flu, Food Shortages, Petrol Crunch, Credit Crunch. As the news cycle has accelerated, the number of civilisation-threatening Plagues of The West have multiplied accordingly ... A few weeks ago, EURSOC ran a round-up of these crises, pondering how media speculation and government interference combined to cause regular scares. What we didn't ponder, until after a few beers last night, was why this must be.
Every new plague has brought with it more centralisation, more government interference, and now, more Europe ..."

Australia highlights the next danger - Spain. Ironies Too (en)
" ... Australia in The Age they today point the watcher towards Spain and particularly Banco Santander ... 'If Banco Santander hits the skids, which is entirely possible as it is trying to bed down the ABN Amro acquisition - which has destroyed its co-acquirers Fortis and RBS - then the prospect of the Bradford & Bingley rescue unravelling comes into play.
Banco Santander is a big one. On the Dow Jones 30 Banks Titan list it is weighted about 5%. To give perspective, Bank of America is about 7% and Commonwealth Bank about 1.5%. If Santander cracks, it is full-blown crisis time in Spain, too' ..."

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