One giant step to EU fiscal union

BBC

Watching the French president and the German chancellor in Paris yesterday I tried to imagine myself a Dutch or Italian voter.

Here, in the middle of August, the two leaders of the eurozone's most powerful countries had interrupted their August to announce that, in future, there would be a eurozone government with an elected president.

Global Markets Move, but Merkel Won't

The Wall Street Journal

Never say that euro-zone countries can't agree on anything. A consensus is rapidly forming: Germany should transfer to its euroland partners more of its hard-earned money, either by lending its impeccable credit to an issue of euro bonds, or contributing more to a much-enlarged European Financial Stability Facility.

Franco-German Proposal Disappoints

Sarkozy and Merkel Propose Euro-Zone Council for Better Governance

By NATHALIE BOSCHAT, BERND RADOWITZ and GABRIELE PARUSSINI

PARIS—The plan by France and Germany to create a head of the euro zone to shore up economic governance of the monetary union stopped short of more fundamental steps toward refashioning the area into a federal entity that would issue its own debt, disappointing investors hungry for a more radical solution to the euro-zone crisis

Selloff raises stakes in Sarkozy-Merkel talks

(Reuters) - The leaders of France and Germany face a stark choice in talks on Tuesday over whether to begin steering the embattled euro zone toward closer fiscal union or risk watching the bloc unravel.

French President Nicolas Sarkozy and German Chancellor Angela Merkel meet in Paris to discuss what further measures they can take to contain Europe's debt crisis, which is now spreading to the continent's core.

Italy has been forced to ramp up its austerity measures and financial market jitters hit France last week with French banks' shares subject to panic selling following rumors that the country could be next to lose its prized AAA debt rating.

Italy and UK press case for deeper euro zone fiscal ties

(Reuters) - Britain's finance minister called for some form of fiscal union to resolve the euro zone's debt crisis on Saturday, while his Italian counterpart renewed a call for the introduction of common euro zone bonds.

After more than a year of piecemeal responses to the euro zone's still-expanding debt crisis, some economists and policymakers are making the case for broader changes to how the currency bloc works.

The spread of market concerns in the crisis to France in the past week have raised the stakes further ahead of a meeting of the bloc's French and German leaders next week -- both of whom have opposed more radical moves to date.

Central bankers to the rescue?

The Economist

They can buy a little time, but the real remedy must come from Western politicians

Aug 13th 2011 | from the print edition

FLAT on its back, feeble and growing weaker, the rich world’s economy is in a sorry state. In the past week the signs of alarm at its condition have multiplied. In Europe yields on Italian and Spanish ten-yearbonds rose above 6%. America fretted at seeing its credit downgraded by one of the big ratings agencies. Around the world, stockmarkets tumbled, with some recording their biggest one-day falls since 2008. Bank shares were hit especially hard, a sign of stress in the financial system. Then the central banks stepped in.

Europe Must Produce Fudge of Much Higher Quality

The Wall Street Journal

By GEOFFREY T. SMITH

This being Europe, every step toward the ultimate resolution of the debt crisis seems ungainly, unbalanced, and generally insufficient. In other words, a fudge. The markets' response to the July 21 Greek rescue package—welcome, then skepticism, then outright rejection—is now a familiar pattern.

How much closer a union?

The Economist

01-08-2011

The euro zone is moving closer towards an uncertain fiscal union

AT THE emergency meeting of euro-zone leaders on July 21st Jean-Claude Trichet, president of the European Central Bank, circulated a set of charts showing how bond spreads had blown out after every summit over the past year. He also handed out a ranking of countries deemed by markets most likely to default: Greece, Portugal and Ireland were at the top, riskier than Venezuela and Pakistan;

Euro Bonds May Be the Best Bet to Resolve the European Debt Crisis: View

Bloomberg

The bond markets are sending Europe’s leaders an unmistakable message: The opportunity to contain the euro area’s debt crisis is slipping away. If they want to save the union and its currency, the leaders will have to consider something far more ambitious than what’s been spelled out so far. Perhaps the unspecified agreement French President Nicolas Sarkozy and German Chancellor Angela Merkelreportedly reached last night on Greek debt marks the beginning of a wider -- and bolder -- effort.