Crisis : 19th February

Sarkozy pledges £2.3bn aid.
" In a televised address to the nation after talks with union leaders, Mr Sarkozy announced new measures worth 2.65 billion euros (£2.3 billion) to help vulnerable people across France weather the crisis, including tax breaks for low income households and bonus payments for the unemployed ..."

We must print more money, says Bank. Sean Farrell, The Independent (en)

" The Bank of England is to start ‘printing’ new money for the first time in 30 years as it runs out of options to kick-start the economy. The Governor of the Bank of England will write to the Chancellor within days to get permission for the unprecedented action ...

... The Bank will create the money by buying government and corporate bonds from financial institutions for new supplies of sterling. Termed “quantitative easing”, it is the modern equivalent of printing money. It is designed to put more cash into the economy, creating more money for companies to spend and for banks to lend. The move marks the most dramatic step taken yet by the Bank as it tries to stop the deepening recession turning into a slump. One of the main reasons for the financial crisis has been the unwillingness of banks to lend money after the sub-prime losses in the US ...

Zoellick urges EU to help east Europe . Lionel Barber, Chris Giles, and Stefan Wagstyl and Tony Barber, The FT (en)

" ... Robert Zoellick, World Bank president, has called for European Union-led co-ordinated global support for the economies of central and eastern Europe, even as divisions emerge in the EU over handling the crisis ...

... ast European leaders reinforced their calls for stronger EU-led region-wide action. Andrius Kubilius, Lithuania’s premier, told the FT: “It would be good to see a more co-ordinated approach from the EU authorities.” Ferenc Gyurcsany, Hungary’s leader, urged central and east European government to jointly support Austria’s proposals for an EU bank package ... "

Germany ready to help eurozone members. Bertrand Benoit and Tony Barber, The FT (en)

" ... Asked on Wednesday whether Germany would risk seeing the eurozone break up rather than take action, Peer Steinbrück, finance minister, told a press conference: “Could you imagine anyone would be willing to put up with this? We would have to take action.” Mr Steinbrück told an event in Düsseldorf on Monday night that “the euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty” ...

... he remarks do not indicate that Germany was proposing to abandon the “no bail-out clause”, which is contained in Article 103 of the EU’s governing treaty and is a cornerstone of European monetary union. Rather, Berlin appears to be thinking in terms of pre-emptive measures to help a eurozone country before it reached the extreme point of being unable to refinance its debt ..."