After almost 20 hours of talks, the EU finance ministers are still split on whether
savers should bear any of the cost of a bailout. The impasse will now be
debated at a meeting of EU heads of government on Wednesday. "I have no doubt
we will reach a deal," French Finance Minister Pierre Moscovici said. Talks in
Luxembourg on Saturday were centred on new rules determining the order in which
investors and creditors would have to pay for bank bailouts. Countries were
divided on whether the Cyprus rescue should be a template for future bailouts,
or whether losses be limited to banks' creditors. The UK is reported to be one
of the countries that does not want to be bound by EU rules, preferring to have
some flexibility over whether to charge depositors in the case of future
bailouts. "It is principally an issue of the non-euro and the euro," said Irish
Finance Minister Michael Noonan. The UK is one of 10 countries in the 27-member
bloc that is not part of the euro. Since the start of the financial crisis in
2008, countries from across the EU have pumped tens of billions into propping up
its ailing banks. In the cases of Cyprus, Spain and Ireland, the country's banks
primarily needed the rescuing. In each case, the national government had to
foot the bill for rescuing its banks, leading to market fears that the losses at
the banks may be more than the government could absorb. The problem was
compounded by the fact that most eurozone governments rely on their own banks to
lend them the money they need. This changed earlier this year, when Cyprus
secured a loan package worth 10bn euros (£8.4bn; $13bn) from its EU partners and
the International Monetary Fund. This included a tax on large deposits and
through banking reform, which will raise 13bn euros. An early proposal to raise
money through a levy on all Cypriot bank deposits - including those below
100,000 euros - caused panic in financial markets and was quickly withdrawn.
This came after bailouts of Greece - twice - as well as Ireland, Portugal, and a
bailout of Spain's banks. Earlier this week, ministers agreed guidelines on how
the eurozone's emergency bailout fund can inject money directly into struggling
banks. The fund will be able to inject a total of 60bn euros into troubled
lenders but the bank's national government, and its lenders and depositors, will
still have to share the burden of any rescue.(source BBC)
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, June 26, 2013
After almost 20 hours of talks, the EU finance ministers are still split on whether
savers should bear any of the cost of a bailout. The impasse will now be
debated at a meeting of EU heads of government on Wednesday. "I have no doubt
we will reach a deal," French Finance Minister Pierre Moscovici said. Talks in
Luxembourg on Saturday were centred on new rules determining the order in which
investors and creditors would have to pay for bank bailouts. Countries were
divided on whether the Cyprus rescue should be a template for future bailouts,
or whether losses be limited to banks' creditors. The UK is reported to be one
of the countries that does not want to be bound by EU rules, preferring to have
some flexibility over whether to charge depositors in the case of future
bailouts. "It is principally an issue of the non-euro and the euro," said Irish
Finance Minister Michael Noonan. The UK is one of 10 countries in the 27-member
bloc that is not part of the euro. Since the start of the financial crisis in
2008, countries from across the EU have pumped tens of billions into propping up
its ailing banks. In the cases of Cyprus, Spain and Ireland, the country's banks
primarily needed the rescuing. In each case, the national government had to
foot the bill for rescuing its banks, leading to market fears that the losses at
the banks may be more than the government could absorb. The problem was
compounded by the fact that most eurozone governments rely on their own banks to
lend them the money they need. This changed earlier this year, when Cyprus
secured a loan package worth 10bn euros (£8.4bn; $13bn) from its EU partners and
the International Monetary Fund. This included a tax on large deposits and
through banking reform, which will raise 13bn euros. An early proposal to raise
money through a levy on all Cypriot bank deposits - including those below
100,000 euros - caused panic in financial markets and was quickly withdrawn.
This came after bailouts of Greece - twice - as well as Ireland, Portugal, and a
bailout of Spain's banks. Earlier this week, ministers agreed guidelines on how
the eurozone's emergency bailout fund can inject money directly into struggling
banks. The fund will be able to inject a total of 60bn euros into troubled
lenders but the bank's national government, and its lenders and depositors, will
still have to share the burden of any rescue.(source BBC)
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Koen Geens, Minister of Finance, Belgium
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French consumer confidence hits alltime low
Gloom in France -- consumers are at their most pessimistic since records began in 1972, according to data released this morning.
The French statistics agency INSEE reported that consumer confidence slid again, to its lowest level since it began monitoring morale in 1972. French consumers are also more downbeat than ever before about their future living prospects.
At just 78, the reading was somewhat shy of analyst forecasts of 81, and far from the long-term average of 100.
The French economy is currently in recession, with unemployment moving steadily higher, and the government trying to cut public spending to hit EU deficit targets. Consumers have plenty of reasons to worry.
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