Browsing all articles tagged with EU
May
18

French President Urges Euro Zone Government

Francois Hollande, French President called on Thursday for an economic government for the euro zone with its own budget the right to borrow a harmonized tax system and a full time president.

At a 150 minute news discussion marking his first year in office a day following economic statistics showed France had fall into recession, the Socialist leader defended his record on economic reform and budget regulation and informed the French people they would have to work a bit longer for a complete pension in future.

Rebutting criticism that France has lost its leadership role in Europe as of its dwindling economic competitiveness, Hollande thought he wanted to create a fully-fledged political European Union within two years.

Hollande said it is my responsibility as the leader of a founder member of the European Union to pull Europe out of this torpor that has gripped it and to reduce people’s disappointment with it.

He accepted that he could face resistance from Germany, Europe’s dominant power, which opposes mutualising debt between member states. Berlin is also reluctant to give the euro zone its own secretariat for fear of deepening division in the EU, among the 17 members of the single currency and the 10 others.

Non-euro Britain’s government previously faces growing domestic pressure to hold a referendum on leaving the bloc.

Hollande stated he wanted Britain to stay in the EU but added, he can understand that others don’t want to join the single currency, however they cannot stop the euro zone from advancing.

Hollande said a future euro zone economic government would debate the main economic and political decisions to be taken by member states, harmonize welfare policies and national fiscal and launch a battle against tax fraud.

He proposed bringing forward planned EU spending to combat record youth unemployment, pushing for an EU-wide transition to renewable energy sources and envisaged a budget capacity that would be decided to the euro zone along with the gradual likelihood of raising debt.

Apr
20

G20 Urges EU to Complete Banking Union Fast, Germany Digs in Heels

World financial leaders support the European Union on Friday to rapidly complete its banking union to help growth, however Germany stood firm that the next step toward such a union be through a risky and lengthy process a change of EU law.

The banking union is one of the key projects to improve the economy of the 17 countries sharing the euro, it would assist eliminate many of the problems that now hold back the flow of credit needed to finance a euro zone economic recovery.

Finance ministers and central bankers from the G20 leading economies said in a statement that the euro area the foundations of monetary and economic union should be enhanced, including through an urgent movement towards banking union.

The EU has previously made the first step it agreed that the European Central Bank would take over the administration of all banks in the euro zone from July 2014 in what is called the Single Supervisory Mechanism.

The next step is to agree how the euro zone will deal with closing down failed banks and how it will pay for that in the provisional period before enough fees from the financial industry accrue to cover the potential expense.

The idea is to use the euro zone bailout fund, the European constancy Mechanism to provide the necessary money for resolving failed banks in that era, however that means the use of euro zone taxpayers money.

The German government, which faces elections in September, consider that without a treaty change the potential use of German taxpayer money for winding down a bank in another euro zone state could give grounds to query it in the German constitutional court.

Wolfgang Schaeuble, German Finance Minister told reporters earlier on Friday that the German government is willing to change the treaties, the sooner, the better.

He said we should do what is necessary appropriately, one must have the strength to do so. The German government is strongly determined to go this way, there was a prospect the changes could be introduced through a simplified procedure to speed the process.

Apr
13

Euro zone finance ministers Back 10 billion Euro Cyprus Bailout

Euro zone finance ministers backed a 10 billion euro bailout for Cyprus on Friday and the European Commission stated it would try to assist the island’s economy grow again with enhanced use of EU structural funds.

The ministerial support opens the way for numerous euro zone countries, including Finland and Germany to seek approval for the three year bailout in national parliaments, so that loan agreement with Nicosia can be signed by April 24.

The first tranche of the credit 9 billion of which will come from the euro zone and 1 billion from the International Monetary Fund will flow to Nicosia in mid-May.

The euro zone loans will have an average maturity of 15 years and highest maturity of 20 years.

The euro zone ministers said in a statement, The Euro group consider that the necessary elements are now in place to launch the relevant national procedures required for the formal support of the ESM financial assistance capability agreement for an amount of up to 10 billion euro’s, subject to IMF’s contribution.

To wrap its financing requirements over three years, Cyprus itself will have to come up with 13 billion euro’s of its own, with the mass of that sum coming from the closure of its Laiki bank and the reform of the Bank of Cyprus.

Olli Rehn told a news in conference that the amount that Cyprus would require to contribute on its own had been estimated a month ago at about 7 billion however the two sums were not directly alike, EU Economic and Monetary Affairs Commissioner.

If you seem at these two figures of 17 billion and the 23 billion for program financing, they are not strictly comparable as the construction of the first and second, or final package are different.

Apr
12

Cyprus Consider Early EU structural Funds, Officials Said

EU officials said that Cyprus is considering placed EU structural funds to earlier use to assist its stricken economy however is not asking for a superior bailout from the euro zone and the International Monetary Fund than the agreed 10 billion euro’s.

Nicos Anastasiades, Cypriot President told reporters in Nicosia on Friday that he would send a letter to European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso to give it extra assistance given the bad economic situation of the island.

That fueled assumption on financial markets that the island may be pushing Brussels for additional money under a bailout package which now illustrates Cyprus contributing roughly twice as much in budget cuts and asset sales than originally debatable.

However euro zone finance ministers gave political backing to 10 billion euro’s of loans for the Mediterranean island on Friday and stated there were no plans or requests to raise that amount.

The letter from President Anastasiades has nothing to do with asking for additional money than the sum decided in the MoU.

It is about a request for more financial assistance and support from our EU partners in the middle term as of the financial and economic situation Cyprus is facing.

The two international lenders have predicted Cyprus will contract about 9 percent this year and approximately 4 percent in 2014 prior to returning to growth in 2015.

Structural funds come from the long term EU budget and are used to co-finance projects in less EU developed countries to assist them enlarged economically.

The flow of such funds is increased over the seven years of the EU budget, however can be accelerated to boost the amount of money in the earlier years at the cost of the outer ones, this method has been employed to help Greece already.

Mar
29

Bank of Cyprus Controls To Previous Month, Minister Says

Bank of Cyprus conceded on Thursday that firmed capital controls would remain in force greater than expected as the island’s banks reopened for the first time following the government was forced to believe a hashed EU rescue package to prevent bankruptcy.

Cypriots lined up peacefully to withdraw partial amounts of cash, however there was no symbol of a run on deposits, as had been frightened.

Banks were shut for almost two weeks as the government discussed a 10 billion euro which is equal to $13 billion international bailout, the first in Euro zone to enforced losses on bank depositors.

Ioannis Kasoulides, Foreign Minister stated curbs on money arrangements imposed following the bailout would be phased out over regarding a month.

A number of restrictions will be lifted and steadily, most likely over a period of about a month according to the estimation of the central bank, the limits will be fully lifted.

Government primarily stated the controls would remain in place for a week subject to reassess. Economists say they will prove hard to boost as long as the economy is in crisis.

A lot of money had already missing electronically. Statistics published by the Central Bank of Cyprus illustrate that savers from other euro zone countries withdrew 18 percent of their deposits from the suffering island in February, as talk of a tax on bank accounts added ground. Overall private sector bank deposits in Cyprus knock down by 2.2 percent to 46.4 billion euros previous month, following a similar slump in January.

To assist the Cyprus banks conditions the crisis, the ECB flew in 5 billion euros which is equals to $6.4 billion in cash overnight from Frankfurt.

Government said it had appointed a board to investigate the banking meltdown and look into assert of junior bondholders.

Constantinos Petrides, under secretary to the Cypriot president said that it will have a broad mandate. It will investigate criminal, political and civil responsibilities.

Mar
25

Cyprus settled A Final Deal With International Lenders To Close Bank, Force Losses

Cyprus settled a final deal with international lenders to pack up its second greatest bank and caused serious losses on uninsured depositors including wealthy Russians, in return for a 10 billion euro  which is equal to $13 billion bailout.

The contract came hours prior to a time limit to prevent a collapse of the banking system in fraught discussions among heads of the European Union and President Nicos Anastasiades, the International Monetary Fund and the European Central Bank.

Rapidly authorized by euro zone finance ministers, the plan will spare the Mediterranean island a financial render down by twisting down the largely state owned admired Bank of Cyprus which is also known as Laiki, and switching deposits lower than 100,000 euros to the Bank of Cyprus to create a good bank.

Deposits over 100,000 euros in both banks, which are not assured under EU law will be frozen and used to determine Laiki’s debts and recapitalized Bank of Cyprus through a deposit/equity exchange.

Jeroen Dijssebloem, Eurogroup chairman said that the attack on uninsured Laiki depositors is expected to lift 4.2 billion euros.

Bank of Cyprus will effectively be shuttered with thousands of job losses. Representative stated senior bondholders in Laiki would be wash out and those in Bank of Cyprus would have to make an input.

An EU presenter stated no across-the-board tariff or tax would be imposed on deposits in Cypriot banks, even though the strike on large account holders in the two major banks is probable to be far superior than originally planned. A first attempt at a deal previous week distorted when the Cypriot parliament discarded a proposed levy on all deposits.

Christos Stylianides, Cyprus government presenter said that they prevent a uncontrollable bankruptcy which would have directed to an exit of Cyprus from the euro zone with unforeseeable consequences.

Wolfgang Schaeuble, German Finance Minister said that the Cypriot officials would not require to vote on the new scheme, as they had previously passed a law setting procedures for bank declaration.

The IMF and EU required that Cyprus lift 5.8 billion euros from its banking sector towards its own financial rescue in return for 10 billion euros in international loans. The head of the EU rescue fund stated Cyprus should obtain the first emergency funds in May.

IMF chief Christine Lagarde stated that the agreement was a credible and comprehensive plan that concentrate on the core problem of the banking system. This contract provides the basis for returning trust in the banking system, which is key to following growth.

Mar
23

Euro Zone Finance Ministers Rally Sunday on Cyprus

17-nation euro zone Finance ministers will seized discussions on Sunday regarding a adjusted bailout of Cyprus.

The conference was planned as Cypriot leaders stated they were closing in on a deal to lift billions of euros commanded by the European Union in return for a bailout to prevent a financial meltdown.

Ruling party said Cyprus was just hours away from a deal to lift billions of euros and release a bailout from the European Union.

A government official said Cyprus’s president would travel to Brussels at this weekend if a resolution was found there to the bailout program.

Herman Van Rompuy, European Council President and Jose-Manuel Barroso, European Commission President also put out a declaration on Friday evening saying they were delayed a planned EU and Japan meeting in Tokyo due to the Cyprus problem.

Both said in a joint statement that the incomplete efforts to sort out a consequence for the financial circumstance of Cyprus thankful for there existence in Brussels.

The meeting had been planned for the proper launch of free trade discussions among the Japan and European Union.

Cyprus accepted legislation on Friday permiting the government to divide the island’s worsening lenders into good and bad banks as it races to settle a bailout from the European Union and prevent a financial meltdown.

Officials stated the law is probably to be practical first to Cyprus’s second largest lender, Cyprus Popular Bank, to streamline it without hurting small depositors.

Mar
16

Italy and France See Leeway on Budget Rules At EU Conference

Italy and France won support for a somewhat further growth friendly explanation of European Union budget rules at a meeting on Thursday following French President Francois Hollande challenged German driven fiscal austerity.

The 27 EU leaders agreed following discussion how to overcome recession and mass unemployment unleashed by three years of the euro zone’s sovereign debt crisis, to allow superior scope for public investment when reducing government deficits.

The potential’s presented by the EU’s existing fiscal framework to balance productive public investment requirements with fiscal discipline objectives can be exploited in the defensive arm of the Growth and Stability.

Exceptions would have to be permitted by the euro zone states and executive European Commission, however Italy’s and Hollande Europe minister drew support from what they depicted as a concession.

The Socialist French leader said that they were summiting their deficit reduction commitments however in a way that does not challenge our objective of growth.

He further said that’s the discussion that is now going to start with the Commission and the leadership we were given today permit us to approach this discussion with confidence.

Germany, the leading stickler for fiscal regulation, is worried that any straying from the course of deficit reduction will lift debt burdens and reignite financial market turmoil.

However Chancellor Angela Merkel avoided any clash with France, they made clear in a very consensual conversation that structural reforms, budget consolidation and growth are not in contradiction however are mutually reinforcing.

Hollande recognized this week that France’s budget deficit would strike 3.7 percent of GDP this year, omitted the 3 percent it had promised EU partners because of flat economy. That illustrate criticism from Germany’s central bank chief who stated French economic restructuring seemed to have floundered.

Mar
4

EU Requir’s Who Vanished Italy Debate on Austerity

European official’s should be asking themselves who lost Italy following a common revolution’s against severity, political privilege and the unemployment reasoned an electoral earthquake in the euro zone’s third economy.

Instead most are persist that their policy mix to fight the euro zone’s debt crisis is right, although the current EU prediction’s have pushed any outlook of significant economic recovery in southern Europe back.

Beppe Grillo and the surprise resurrection of former Prime Minister Silvio Berlusconi on an anti-austerity platform in previous week’s election have thrust Rome into political deadlock a flow in support for anti-euro populist.

Mario Monti governed Italy with respected technocrat for 15 months since Berlusconi’s previous government knock down, is far from the worst exaggerated by the three year old debt crisis.

There unemployment rate is at 11.7 percent, less than half the rate of Spain and Greece, where one of every two young people are jobless.

If a milder slump and tax climb and less harsh spending cuts can sourced such a electoral and social revolt in Italy, the risks of an detonation in Spain and Greece ought to be superior.

European Commission President Jose Manuel Barroso said in a combined statement with Monti stated that the crisis is not yet over and efforts must not be relaxed.

Barroso stumble off statistics presenting current account deficits in Spain, Portugal, Greece and Italy were recoiling and Ireland was back in surplus. Exports from Portugal and Spain were growing and the labor competitiveness gap among southern and northern Europe was contracting.

Those statistics have a backside. Payments inequity are down mostly as those countries imports have contracted due to sinking demand. The labor cost gap has turn down mostly due to mass layoffs in southern states rather than productivity addition’s.

Mar
1

High jobless, Low inflation rate Demonstrate euro crisis impact

Inflation dropped in the euro zone in February and joblessness climbed to an all time high, stress the impact of the federation debt crisis.

The EU’s statistics office Eurostat said on Friday that the 17 nation’s shared currency annual inflation rate was 1.8 percent in February, approximately the ECB’s target of below however close to 2 percent and by more than expected.

Eurostat said that the January’s unemployment rate temporarily increased to 11.9 percent in the bloc, climbed from 11.8 in December with another 201,000 people out of work.

The somber economic circumstances will possibly consider on the ECB’s Governing Council when it gathered on March 7, as only a alternative of economists see any early move to cut the bank’s standard rate below the current 0.75 percent, consumer prices are no longer an concerned.

Sarah Hewin, head of European research at Standard Chartered said that the inflation is just not a concern, it is not a cause why policymakers would be uncertain to cut interest rates.

They could shift as early as coming week, however there’s an element of the ECB wanting to keep its powder dry as we go into an uncertain Cypriot debt and political situation with Italy the question to be resolved.

Although the sluggish pace of price boost may make it easier for Europeans to buy clothing and food, it is little relieve to the record 19 million people unemployed in the euro zone.

Three years of crisis have determined major euro zone economies such as Spain and Italy, into a crushing recession, with businesses not capable to obtain the financing they need to increasing and citizens unable to earn sufficient to spend with confidence.

Generally joblessness also masks a large divide, with only 5 percent unemployment in Austria compared with 27 percent in Greece.