Browsing all articles tagged with European Union

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.


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.


Michael Sarris Cyprus Finance Minister Quits, Capital Controls Partly Eased

Michael Sarris, Cypriot Finance Minister quit on Tuesday following concluding talks with foreign lenders on a bailout that forced the island to hit extraordinary losses on bank depositors in return for aid.

The news came following Cyprus announced a partial relaxation of currency controls, lifting the ceiling for financial transactions that do not require central bank approval, however keeping most other restrictions in place.

Sarris, who was dispatched to Moscow previous month however come back empty handed as Cyprus sought Russian aid following rejecting a European bank levy proposal, stated his main goal of agreeing a deal with lenders had been accomplished.

He stated it was also suitable to quit since he was between several people under scrutiny by a team of investigators seeming into the collapse of the country’s banking system, his resignation was accepted by the government.

He suppose that in order to facilitate the work of investigators the right thing would be to place my resignation at the removal of the president of the republic.

Prior to quitting, he stated it was not clear when the residual capital controls would be lifted.

The island introduced control on money movements when banks reopened on March 28 following a two-week shutdown as the government negotiated a 10 billion euro bailout from the European Union and the International Monetary Fund.

Cyprus’s status as a financial hub has deteriorate in the space of a fortnight following authorities were forced to wind down one bank and slap heavy losses on richer depositors in a second in return for the financial aid.


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.


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.


Gold Headed For Greatest Weekly Climb In 4 Months On Cyprus

Yellow metal traded near a 4 week high on Friday, underpinned by safe haven demand on the fear of a possible financial meltdown in Cyprus. The crisis has placed gold on track to phase its largest weekly climb in four months.

Holdings of SPDR Gold Trust, the world’s greatest  precious metal’s backed exchange traded fund, knock down 0.902 tonnes from the last session to 1,221.26 tonnes on March 21, the weakest since July 2011, the fund is started for a twelfth week of outflows.

Concerns regarding Cyprus’s finances resurged, as the European Union gave the country till Monday to lift the billions of euros it wants to settle an international bailout or face the collapse of its financial system and possible exit from the euro zone.

Officials in Cyprus delayed until Friday a discuss on emergency legislation listed by the government to meet the island’s financial crisis, saying they required further time for consultations.

In US a series of data on Thursday on the labor market, home sales and factory activity pointed to a rising energy in the US economy in the first quarter.

The US House of Representatives reduced the threat of a government shutdown coming week, approving on Thursday a stop gap funding bill that eases follower tensions following months of bitter fights over budgets.

Spot gold was traded on little changed rate at $1,614.74 per ounce by 0008 GMT, following increasing to a 4 week high of $1,616.36 during the previous trading session. Gold was headed for a weekly addition of about 1.5 percent in its third weekly climb, its greatest weekly climb in four months.

US gold were traded nearly flat rate at $1,614.20 per ounce.

The new governor of the Bank of Japan stated the central bank is ready to use all resources accessible including buying longer term assets, to attain its 2 percent inflation target.

Gold future for April delivery knock down $1.10 to $1,612.80 per ounce during the Asia trading session.


Gold Continue Additions As Fed Sticks With Stimulus

Precious metal traded little changed rate on Thursday, following shattering four days of addition in the previous session as the Federal Reserve’s vowed to stick with its bond buying programme offset doubts regarding a debt crisis in Cyprus.

Taking the steam out of yellow metal’s current rally, investors are showing some hopefulness the problems in Cyprus might not extended further in the euro zone.

The Federal Reserve on Wednesday pressed forward with its aggressive policy incentive despite developments in the US economy, pointing to still lofty unemployment, fiscal headwinds out of Washington and risks from overseas.

Cyprus extended a bank lockdown to coming week and measured nationalizing pension funds on Wednesday, rushed turn away a financial meltdown following rejecting the terms of a bailout from the European Union and rotating to Russia for a lifeline.

The right-wing Swiss People’s Party known as SVP has collected sufficient signatures to force a referendum on a suggestion to ban the country’s central bank from selling any of its bullion reserves.

Holdings of SPDR Gold Trust, the world’s largest gold backed exchange traded fund remain same from a day earlier at 1,222.162 tonnes.

Spot gold was traded on little changed rate at $1,605 per ounce by 0042 GMT, off a three week high of $1,615.16 per ounce hit earlier this week. US gold slumped down 0.2 percent to $1,604.40 per ounce.

Gold futures for April delivery dropped more on Wednesday in electronic trading. April gold was at $1,606.40 per ounce in electronic on Globex, compared with its $1,607.50 per ounce settlement on the Comex division of the New York Mercantile Exchange.


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.


Spanish And German Jobs, To Have And Have-not

Everyone required a New Year reminder of the split that has been threatening to tear apart the 17-nation euro zone need only look at Thursday’s Spanish and German jobs data.

The figure of Germans jobless were actually climbed for the ninth month running in December, dazzling some of the damage of the euro zone debt crisis on Europe’s major economy.

Germany’s jobless figure rises and remains close to a post reunification low. Spain’s development was based approximately entirely on temporary holiday jobs. About one-in-four Spaniards are out of work.

The prospect for 2013 from analysts is jobs growth in Germany and additional joblessness in Spain.

The labor accomplishment in Germany  unemployment rate about 6.8 percent, is moderately thanks to years of wage command and structural reforms undertaken in the mid-2000s.

Spain, the euro zone’s fourth major economy only passed a labor reform in February 2012, under European Union stress to meet budget deficit targets.

Mariano Rajoy’s, Spanish Prime Minister said that jobs reform has shaken up working regulations to make it easier to fire people, leading to enormous lay-offs at big companies.

Enduring hiring in Spain has yet to pick up despite efforts to make the structure more flexible.

According to labor ministry figures, Although the amount of people out of work in Spain knock down by 1.2 percent in December typically thanks to the holiday hiring, analysts were not hopeful for a change in trend in the damaged job market.

IHS Global Insight analyst Raj Badiani, predicting a further labor shake-out by saying that we anticipate renewed job losses at the start of 2013, with the current lead indicators suggesting the economy is set to tolerate further output losses in the first half of 2013.


German lawmakers Approves Revised Bill on Greece Aid

German Parliament approved Greece’s current rescue package as Finance Minister Wolfgang Schaeuble cautioned that a default in the country where the debt crisis started could generate the collapse of the single currency.

Schaeuble stated in a speech to the Bundestag in Berlin that the potential effects of a Greek default on other euro states would be critical in truth the penalty would be unpredictable. It could activate a process at the end of which the entire euro zone could break apart.

The channel caps a year in which Chancellor Angela Merkel has had to pack down criticism within her ranks over shifts to Greece and suppress calls to force out the country from the euro.

Officials in Merkel’s coalition and opposition leaders this week mention the agreement in Brussels to give Greece additional time to meet budget targets. The agreement met Germany’s condition on ruling out a debt write off for Greece that would be experience by creditor countries taxpayers.

Evaluating Greece with eastern Europe following the collapse of the Soviet Union, Schaeuble said crisis hostility efforts are working as European leaders drives through a new package designed to ease terms for bailout aid for Greece and help to resolve the three year old debt crisis.

Unemployment in the euro zone increased to 11.7 percent from 11.6 percent in this September, according to the European Union’s information office.

Schaeuble said that the Greek population has had to tolerate a heavy burden. However if the Greek people are prepared to carry the burden, we were ready to help.