Friday, 17 October 2008

Newspapers : 17th October

IMF ready to help stabilise Ukraine. The FT (en)
EU leaders demand recession safeguards. The FT (en)
Germany slashes 2009 growth forecast. The FT (en)

Christine Lagarde warned Hank Paulson to bail out Lehman Brothers. Henry Samuel and Harry Wallop, The Telegraph (en)
" ... Sources close to Mrs Lagarde said that she had called the US Treasury Secretary - a close personal friend - well before the ailing bank's collapse imploring him to act, but he chose not to ...
... Mrs Lagarde, a perfect English speaker, said that governments must be "vigilant" over the health of hedge funds. "Initially everybody thought the hedge fund sector would be the first one to actually cause the collapse. They are vastly unregulated, they have been operating at the fringes, at the margin, and we need to be careful that there is no contamination effect," ... gave no concrete proposals as to how the situation could be fixed. "One thing at a time; We are working on that at the moment but I don't have the tools and the fixing and the solutions on hand," ....
... She has asked European Central Bank head Jean-Claude Trichet to come up with a way of measuring the true liquidity among banks, which she said could not be seen by looking at stock exchanges. "This is not an easy index to communicate on, you need measure spreads of money markets. I suggested to Jean-Claude Trichet to think about an instrument that helps measure liquidity of system," ..."

Crunch resurrects Marx.Erik Kirschbaum , The Independent (en)
" ... His 1867 critical analysis of capitalism, Das Kapital, has risen from the publishing graveyard to become an improbable best-seller for the academic publisher, Karl-Dietz-Verlag.
"Everyone thought there would never again be any demand for Das Kapital, the managing director, Joern Schue-trumpf said. He has sold 1,500 copies so far this year, triple the number sold in all of 2007 and a 100-fold increase since 1990" ..."

Sarkozy over-reacts to French anthem incident . Charles Bremner, The Times (en)
" ... For 24 hours, the top story in France has not been the slumping markets or President Sarkozy's crusade to rebuild the world economy. It has been the fit of indignation, led by Sarkozy, over the fans who jeered the national anthem before the start of the match at the Stade de France on Tuesday night ...
... The Communist leader was one of the few eminent politicians to break ranks with the cross-party outrage. As well as condemning the jeering, people should ask why thousands of young French people boo the national anthem, she said. "Perhaps it is because they are suffering a lot. That they have the impression that they are stigmatised although they are in France, study here and work here." ...
... Le Monde has come out with a tough editorial against the excessive response to the footbal episode. It asks: Is it worthy of the main public leaders to turn a deaf ear to what this jeering expresses: the rage of the banlieues, the feeling of rejection and despair of the young descendants of immigrants, the searing and corrosive failure to integrate them into the community of the republic? ...

Euro stability helps to forge common goal. Ralph Atkins, The FT (en)
" ... Europe faced the full blast of the financial crisis this week, but for the continent’s monetary union it has not been all bad news.
The safety offered by the euro, which in its 10 years has become a stable, global currency, has suddenly made it more attractive ...
... Brian Cowen, Ireland’s premier, struck a similar chord on Thursday, saying his country “would have been in a far worse position had it not been for our membership of the EU, the euro and the role the European Central Bank played” ...
... In one respect life may also have become easier for eurozone policymakers. Until recently different countries performed differently ... Now, argues Holger Schmieding, economist at Bank of America, the threats to real economies are common – making it easier, for instance, for the European Central Bank to follow a one-size-fits-all interest rate policy. “For the internal cohesion of the eurozone it has not been bad,” he said ..."

Editorial comment: Diversity in unity. The FT (en)
" ... Some politicians have hailed this brisk action by the bigger member states as a fine model of European co-operation. In Brussels-speak, this was a triumph of inter-governmentalism. Who needs those fastidious commissioners in Brussels? Why worry about reviving the stillborn Lisbon reform treaty? National governments have proved that they can swiftly act in their collective self-interest when the occasion demands.
This may be true, but only up to a point, as the other business on the EU council agenda showed. As the economic slowdown grips Europe, the risks of fragmentation between member states are growing ever more acute. Poorer countries fear the EU’s environmental policies will unfairly hobble them. A dangerous economic faultline could easily develop between the 15 eurozone countries and the other 12 other EU members ..."

Iceland accuses UK of financial ‘siege’. Sarah O’Connor, The FT (en)
" .. “It seems to me the English banks and government is holding Iceland in a siege,” said Hyörtur Giflafonsson, owner of Örgovik, a fish exporter. “If this siege continues we will be thrown backwards 20 years.”
The central bank has asked all commercial banks abroad to route payments through it, a move it hopes will restore trust. However, several exporters said UK banks were refusing even to ship money via the central bank. Mr Giflafonsson said one customer in London was trying for the fourth time to find a bank willing to transfer his payment ..."

Canada and Europe Ponder Trade Pact. Ian Austen, The NYT (en)
" ... Following a meeting in Quebec City, Canada’s prime minister, Stephen Harper, and President Nicolas Sarkozy of France, who is the president of the European Union as well, are expected to sign an agreement for preliminary negotiations meant to create a trade pact between Canada and Europe that would be even more sweeping than the North American Free Trade Agreement.
A person who is familiar with the government’s plan, but who did not want to be identified as upstaging an announcement by two heads of state, said the agreement would begin “a scoping exercise leading to the launch of talks.” ...
... Although proximity has made the United States Canada’s top trading partner, there have been many attempts to reduce the country’s economic dependence on its neighbor to the south ...
... Trade with the United States made up about 37 percent of Canada’s gross domestic product in 1990 and rose above 65 percent 10 years later ..."

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