The leaders of France and Germany have announced that they are ready to recapitalise Europe's troubled banks and have reached agreement on a "long-lasting, complete package" to counter the bloc's debt crisis. But the German chancellor, Angela Merkel, and Nicolas Sarkozy, the French president, refused to go into detail about the plans, saying they had to think of the markets and iron out "technical issues" before consulting the other 25 leaders in the European Union. The announcement came hours after the governments of France, Belgium and Luxembourg said they had approved a plan for the future of the embattled Franco-Belgian bank Dexia. "We are determined to do whatever necessary to secure the recapitalisation of our banks," Merkel said at a joint news conference with Sarkozy at the chancellery in Berlin on Sunday evening. "A sound credit supply is the basis of sound economic development," she added. Both leaders were tight-lipped on whether they had decided that the €440bn (£380bn) bailout fund, the European financial stability facility (EFSF), could be used to recapitalise banks – a position known to be favoured by the French – or whether it could only be used as a last-ditch resort if a member state could not cope with shoring up its banks' capital on its own. The latter is known to be Merkel's preference, but on Sunday the chancellor would only say: "Germany and France want the same criteria to be applied, and criteria that are accepted by all sides." Merkel added: "We are not going into details today," adding that the duo would present a "complete package" for stabilising the eurozone at the end of the month in time for the G20 summit in Cannes on 3-4 November. "This summit has to be a success for the sake of the global economy," she stressed.
Access Investments-Building Awareness - European Union-ROMANIA
Monday, October 10, 2011
The leaders of France and Germany have announced that they are ready to recapitalise Europe's troubled banks and have reached agreement on a "long-lasting, complete package" to counter the bloc's debt crisis. But the German chancellor, Angela Merkel, and Nicolas Sarkozy, the French president, refused to go into detail about the plans, saying they had to think of the markets and iron out "technical issues" before consulting the other 25 leaders in the European Union. The announcement came hours after the governments of France, Belgium and Luxembourg said they had approved a plan for the future of the embattled Franco-Belgian bank Dexia. "We are determined to do whatever necessary to secure the recapitalisation of our banks," Merkel said at a joint news conference with Sarkozy at the chancellery in Berlin on Sunday evening. "A sound credit supply is the basis of sound economic development," she added. Both leaders were tight-lipped on whether they had decided that the €440bn (£380bn) bailout fund, the European financial stability facility (EFSF), could be used to recapitalise banks – a position known to be favoured by the French – or whether it could only be used as a last-ditch resort if a member state could not cope with shoring up its banks' capital on its own. The latter is known to be Merkel's preference, but on Sunday the chancellor would only say: "Germany and France want the same criteria to be applied, and criteria that are accepted by all sides." Merkel added: "We are not going into details today," adding that the duo would present a "complete package" for stabilising the eurozone at the end of the month in time for the G20 summit in Cannes on 3-4 November. "This summit has to be a success for the sake of the global economy," she stressed.
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Banking sources said talk in Europe has shifted to creating backstop facilities that are based on guarantees or insurance, rather than cash, to protect sovereign ratings. "Any non-paid-in structure is infinitely preferable," one source said. Governments could provide a guarantee of "contingent capital" for a price, in an arrangement similar to the one struck with Royal Bank of Scotland in 2008, they said.
Chancellor Merkel said France and Germany "are determined to do everything necessary to ensure the recapitalisation of our banks", adding they want "the same criteria to be applied and criteria that are accepted by all sides".
Well – that's how the organisers pitched it. In fact Palin's been banging on again about what she likes to call "crony capitalism" - meaning only the elite, and friends of the elite, can prosper.
"When cronyism thrives, innovation, prosperity, and freedom suffer because small innovative firms get shoved outside," she said. "Only by empowering the individual will our economies be rescued."
All of which may be true, but is Palin really the right person to make that point? Her decision to hire old school friend Franci Havemeister as agriculture secretary, after the candidate cited her childhood love of cows as a qualification for running the $2m agency, is a classic of the genre.
10.34am: It's probably time for a quick update on the markets - which have slipped ahead of the Slovakia vote. The FTSE 100 is down just under 1% at 5351.36 while the Eurofirst 300 is off 0.72% at 956.93.
Meanwhile - that old safe haven of gold has fallen by 1% this morning as the dollar's recovery against the euro prompts buyers to take some profits.
10.12am: And another bit of data. British house prices rose by 0.6% on a seasonally adjusted basis in August, the biggest rise since March. The Department of Communities and Local Government said prices were 1.3% lower than a year earlier, the smallest annual fall since April, taking the average price of a home to £208,476.
10.09am: Is MPC member Adam Posen being muzzled? Having previously trumpeted his speech at the annual global alternative investment management conference in New York this afternoon, the Old Lady of Threadneedle Street now says that it will not now be releasing a text. It's like the dog that didn't bark.
Not good, not good at all. But it's going to get worse before it gets better.
Many analysts were struggling with the concept of low growth and reduced unemployment, the argument was productivity was declining as a result.
The reduction in part-time jobs might suggest something more fundamental with the economy picture becoming more 'real'
We desperately need the euro zone to sort itself out, this is sapping investor confidence.
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