Friday, June 22, 2012

German politicians have reached an agreement that will allow parliament to approve the setting up of a permanent eurozone bailout fund and the fiscal pact which eurozone leaders agreed to last year.  Angela Merkel's government and the opposition Social Democrats said they had agreed on the measures, which will give the Chancellor the two-thirds majority in parliament she needs when it goes to a vote next week.  There's a bit BUT though - Volker Kauder, the parliamentary leader of Mrs Merkel's party said again there would ne debt mutualisation in Europe, aka no eurobonds ... The head of the International Monetary Fund has piled pressure on Germany by recommending a series of crisis-fighting measures that chancellor Angela Merkel has resisted.  IMF managing director Christine Lagarde warned that the euro is under "acute stress" and urged eurozone leaders to channel aid directly to struggling banks rather than via governments. She also called on the European Central Bank to cut interest rates.  The comments came as Italy's prime minister Mario Monti, warned of the apocalyptic consequences if next week's summit of EU leaders were to fail.  The stark message from Lagarde, delivered to eurozone finance ministers who met in Luxembourg, will increase pressure to come up with a unified approach to tackle problems including Spain's struggling banks. She urged the 17 eurozone countries to consider jointly issuing debt, helping troubled banks directly, and suggested relaxing the strict austerity conditions imposed on countries that have received bailouts.....
Luxembourg's Jean-Claude Juncker has said he'll step down as chairman of the forum of the eurozone finance ministers this year, citing the heavy workload and his health.  Schaeuble has said he wants the job but Hollande is thought to be anxious about appointing a champion of austerity to such a key role.   If Germany gets the Eurogroup job, France gets to appoint their man as head of the bailout fund the European Stability Mechanism and vice versa.  Hollande is expected to put his petitions to Angela Merkel, Italy's Mario Monti and Spain's Mariano Rajoy at their talks in Rome on Friday.

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