Euro-Area Debt Pooling Abandoned by EU Parliament in Budget Law

By Jonathan Stearns - Feb 20, 2013 11:20 AM GMT+0200

Bloomberg

European Parliament negotiators abandoned a demand for a fast-track move toward debt pooling by euro governments at the insistence of a German-led group of nations opposed to such an anti-crisis step.

EU Leaders to Meet On Greece, Growth

By MATINA STEVIS And RIVA FROYMOVICH

The Wall Street Journal

… Prime ministers will be confronted with new reality of fiscal surveillance…

The euro: Still in casualty

BBC

By Gavin Hewitt (http://www.bbc.co.uk/news/correspondents/gavinhewitt)

22-12-2011

… The last summit …was a non-event…

… The political implications of all this can only be guessed at…

…. Increasingly the crisis over the single currency will focus attention on the state of European democracy…

… comprehensive solution to the eurozone crisis is technically and politically beyond reach…

… Some Europeans believe that a more closely integrated Europe will emerge out of the crisis…

EU Ministers Seek Crisis IMF Funding Deal

Bloomberg

By Patrick Donahue and Stephanie Bodoni - Dec 19, 2011 10:58 AM GMT+0200

… it’s doubtful they’ll put markets in a Christmas mood…

… an overall crisis solution may be “technically and politically beyond reach.”…

… the U.K. hadn’t agreed to increase its IMF contribution…

… requiring a high-deficit state to amass a super majority within the euro region to head off disciplinary procedures,…

Euro at 11-Month Low

Selloff Comes After Period of Resilience for the Currency

The Wall Street Journal

By TOM LAURICELLA

… ECB officials feel governments are moving more aggressively to address the debt crisis…

… recession in Greece is turning out to be deeper than expected…

… Betting on a lower euro had been a particularly fruitless trade for many hedge funds…

…"The general consensus is that each time the fiscal authorities don't come up with concrete, well-funded plans, the probability increases that the ECB has to step in,"…

Cameron’s Backers Look Past ‘History of Antipathy’

Bloomberg

By Kevin Crowley and Ambereen Choudhury - Dec 13, 2011 2:01 AM GMT+0200

… Cameron cited defending London’s financial-services industry as the main reason he refused to join 26 other nations…

…Sarkozy and Merkel have endorsed a financial-transactions tax… George Osborne has called the plan an “attack” on London firms,…

…“For the U.K. economy it’s the equivalent of North Sea oil and it’s not running out.”...

…“This seems to be about the protection of banks rather than the country as a whole,”…

… anything that might result in the Europeans building an option to avoid the City would be unhelpful…

… If I were a rich German, I would already have put half my money in London. In sterling…

Questions Plague EU Pact

Europe's Leaders Agree to Repair Flaws in Currency, but Bold Strokes Missing

By CHARLES FORELLE And STEPHEN FIDLER

The Wall Street Journal

…Europe's leaders crafted a new "fiscal compact"… But the crucial government bond markets were mostly flat…

… It's unclear how quickly the pact could actually go into effect…

… U.K. Prime Minister David Cameron vetoed an EU-wide treaty… renewing questions about the future of the relationship…

… Euro-zone members who run outsize government deficits will face automatic penalties, … governments will put balanced-budget procedures of some form in their national laws…

… The only question that the market is currently asking is whether the political deal opens the way for more forceful intervention by the ECB…

… The months ahead will be filled with serious challenges…

Merkel Calls for More 'Concrete' Union

The Wall Street Journal

By WILLIAM BOSTON and MARCUS WALKER

Ms. Merkel's first challenge, however, is to overcome her differences about the way forward with French President Nicolas Sarkozy…

… that euro members would have to accept a loss of national sovereignty, and that there is no quick fix to the crisis.

… they are prepared to sign a fiscal pact among the euro zone's 17 governments if the wider, 27-country EU won't agree…

…massive ECB intervention, …, if it doesn't work, could leave Europe staring into the abyss with no more cards to play…

…the potential for bondholder losses in future has helped to undermine investors' confidence…

Europe's Leaders Pursue New Pact

Deal Would Bring Closer Fiscal Ties

By MARCUS WALKER, DAVID GAUTHIER-VILLARS and BRIAN BLACKSTONE

The Wall Street Journal

Euro-zone leaders are negotiating a potentially groundbreaking fiscal pact….

… persuade the European Central Bank to undertake more drastic action…

… a centralized fiscal-enforcement authority with power to seize control of national budgets…

It isn't clear how the ECB would respond to such a pact…

Debt Crisis Is a Symptom of Wider Failings

The Wall Street Journal

By SIMON NIXON

There can be no solution to the euro-zone crisis that doesn't first address this governance crisis…

The euro zone in its current form was destroyed at Deauville in October 2010 with the insistence that bondholders would be required to take losses… it was buried at Cannes…The first introduced previously unexpected credit risk into the sovereign-bond market, the second introduced foreign-exchange risk…

…the run on the banking system is equally damaging…

At best, the ECB can only buy time—but time for what?

…full-blown fiscal and political union needed to credibly underpin euro bonds…

Insight: Euro has new politburo but no solution yet

(Reuters) - Europe has a new informal leadership directorate intent on finding a solution to the euro zone's debt crisis, but it has yet to prove its ability to come up with a lasting formula.

Forged in the fire of a bond market inferno, the shadowy so-called Frankfurt Group has grabbed the helm of the 17-nation currency area in a few short weeks.

EFSF Leverage Euro Zone's Most Dangerous Delusion

By GEOFFREY T. SMITH

Last weekend's meetings of the International Monetary Fund and G-20 were punctuated by panicked calls for an increase in the size of Europe's rescue funds, most of them aimed, predictably, at Germany.

Aggregating Conceals Some Important Facts

The Wall Street Journal

Let us not praise famous men, to borrow from James Agee.

Not Angela Merkel, who asks all players in the euro-zone drama for patience, an attribute of which the market is short, rather than long. But then, markets have never been more than an annoyance to Europe's political class.

Should Busted Greece Stay In Euro Zone?

The Wall Street Journal

Should they stay or should they go? Now that it's (almost) all right to admit that Greece is insolvent, the question can now be asked: When should it default, and should it stay inside the euro zone or not?

The first question is a lot easier than the second. An imminent default, rumored by some on Monday, does nobody any good. The Greek government still has a primary deficit, and can't afford to repudiate its debts while it still can't cover its outlays with tax revenues. It also has no guarantee that the European Central Bank would continue to lend against defaulted Greek debt, and would have to reckon with the risk of its banking system collapsing instantly as a result.

Greece Won’t Default, Yet

The Wall street Journal

Germany has been a rich source of saber rattling over Greece, much of it for domestic political consumption.

In the end, Germany will have to give in and let Greece have its September bailout installment, giving Athens until the next tranche in December to see if its new taxes can work off a dangerously widening budget deficit.

Senior IMF officials now acknowledge as much, sympathizing with the headwinds Greeks face with their economic recession. The alternative is too terrible to contemplate, with crumbling European credit markets in recent days giving only a pale hint of what a Greek default would wreak.

Making Strength of Zone's Weakness

The Wall Street Journal

Common Euro Bond Issue, Opposed by Many Leaders, Could Create an Investor Haven

The world is short of secure destinations for investment funds, as shown by Switzerland's dramatic efforts this week to deter the floods of capital entering the Alpine safe haven. Here's a solution: euro-zone bonds, debt instruments issued collectively by euro-zone nations that could offer for the first time a real alternative to the U.S. Treasury market. They have another advantage: They could also save the euro zone.

The Worst-Case Euro Scenario

Each day the currency remains on life-support in its current form, the consequences of its eventual death become graver.

The Wall Street Journal

By SAJID JAVID

On the Continent, August is usually reserved for long vacations in the sun. Instead, European leaders spent the month working on increasingly desperate attempts to save the euro in its current form. There's only one prospect more frightening than what would happen if they fail: what would happen if they succeed.

The end of Monnet

The Economist

The debt crisis is exposing problems in the basic design of the European Union

Sep 3rd 2011 | from the print edition

ALL it the curse of the euro. When politicians discuss the single currency’s crisis in Brussels, their actions are invariably seen by markets to be too little, too late. When they return home, they are accused of surrendering too much, too fast. So bond markets swoon and leaders become enfeebled. Such has been the fate of last July’s summit deal to save Greece for the second time and boost the embryonic European monetary fund. Government debt is dangerously wobbly in Italy and Spain, yet political approval of the deal has hit trouble in Germany and Finland.

Among the dinosaurs

The Economist

France’s Socialists have yet to come to terms with the modern world

BLISS is it in a financial crisis to be a socialist. Or so it ought to be. In speculators and ratings agencies, Europe’s left has a ready cast of villains and rogues. In simmering social discontent, it has an energising force. A recent issue of Paris-Matchinadvertently captured the mood: page after full-colour page on Britain’s rioting underclass were followed by gory visual detail of the bling yachts crowding into the bay near Saint-Tropez. Time, surely, to put social inclusion before defiant decadence.

Eurobond Plan Would Need a Big Sweetener

The Wall Street Journal

The euro-zone crisis is solved. It took some doing, but the final pieces are in place.

First, Italian Prime Minister Silvio Berlusconi has promised to reform his nation's no-growth economy. Second, the European Central Bank has agreed to buy bonds of troubled countries, including Spain and Italy. Third, euro-zone leaders have agreed to authorize their bailout fund—a.k.a. the European Financial Stability Facility—to buy euro-zone government bonds in the secondary market. I would add a fourth but it takes irony too far: Euro-zone leaders have benefited from advisory phone calls from President Barack Obama, and Treasury SecretaryTimothy Geithner's warning that they are moving too slowly to confront their debt crisis.

Worries over and head for the beaches.