EU leaders came under pressure from the International Monetary Fund on Monday to bolster the firewall around Italy and Spain, as talks between Greece and its creditors remained in deadlock for a third week. The IMF director general, Christine Lagarde, told Brussels to drop its opposition to a bigger insurance fund, with a view to convincing world money markets that Europe has the firepower to protect vulnerable nations. The former French finance minister pointedly gave her warning in Berlin where Angela Merkel's conservative government has led opposition to providing bigger loans for the EU's bailout fund. Lagarde's speech came as a senior Greek official warned the eurozone would "dissolve" if Greece was forced out of the euro after being offered what he described as non-negotiable but unaffordable rates of interest with its creditors. Gikas Hardouvelis, who heads the economics team advising prime minister Lucas Papademos, said the EU would be abdicating its responsibility if it allowed banks, insurers and hedge funds to offset a 50% writedown of the country's debts by charging interest rates of around 4%. He said that enforcing such rates would be the same as kicking Greece out the euro, in a speech adding to tension in Brussels. The gloom surrounding Greece's chances of charting a route to sustainable debt levels overshadowed attempts to agree the details of the permanent euro bailout fund and its complement, a "fiscal compact" intended to entrench German-style fiscal rigour across the eurozone.
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Tuesday, January 24, 2012
EU leaders came under pressure from the International Monetary Fund on Monday to bolster the firewall around Italy and Spain, as talks between Greece and its creditors remained in deadlock for a third week. The IMF director general, Christine Lagarde, told Brussels to drop its opposition to a bigger insurance fund, with a view to convincing world money markets that Europe has the firepower to protect vulnerable nations. The former French finance minister pointedly gave her warning in Berlin where Angela Merkel's conservative government has led opposition to providing bigger loans for the EU's bailout fund. Lagarde's speech came as a senior Greek official warned the eurozone would "dissolve" if Greece was forced out of the euro after being offered what he described as non-negotiable but unaffordable rates of interest with its creditors. Gikas Hardouvelis, who heads the economics team advising prime minister Lucas Papademos, said the EU would be abdicating its responsibility if it allowed banks, insurers and hedge funds to offset a 50% writedown of the country's debts by charging interest rates of around 4%. He said that enforcing such rates would be the same as kicking Greece out the euro, in a speech adding to tension in Brussels. The gloom surrounding Greece's chances of charting a route to sustainable debt levels overshadowed attempts to agree the details of the permanent euro bailout fund and its complement, a "fiscal compact" intended to entrench German-style fiscal rigour across the eurozone.
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The International Monetary Fund has slashed its growth forecasts for most major countries in 2012 and urged governments to adjust the "rhythm" of their austerity measures to avoid derailing economic recovery.
what recovery?
Madame Tango tells European taxpayer to adjust to more of their tax going to banks insteadd of useful public services such as schools, hospitals etc.
The International Monetary Fund has slashed its growth forecasts for most major countries in 2012 and urged governments to adjust the "rhythm" of their austerity measures to avoid derailing economic recovery.
In an update of the forecasts in its autumn World Economic Outlook, the IMF said output in most major economies were, "decelerating but not collapsing". It pinned much of the blame on the debt crisis in the eurozone, where it expects GDP to shrink by 0.5% during this year.
On the IMF's central projection, "most advanced economies avoid falling back into a recession, while economic activity in emerging and developing economies slows from a high pace." It is now expecting world GDP growth of 3.3% in 2012, down from the 4.1% it forecast in September
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