Berlin - German Chancellor Angela Merkel has "no memory" of allegedly pressuring Spain on taking a bailout in 2011, her spokesman Steffen Seibert said on Friday (6 December).
Former Spanish Prime Minister Jose Rodriguez Zapatero last week published a book called "The Dilemma" about his last years in office, recalling how Merkel, as well as the heads of the European Central Bank (ECB) and the International Monetary Fund (IMF) approached him during 2010-2011 to ask his country to take a bailout. He says he refused each time.
On Merkel, he gave a detailed account of a 2011 meeting in Cannes, where France was hosting a "G20" meeting of the world's richest countries. "She greeted me pleasantly and almost without any introduction put forward a proposal about which we had not had any indication," Zapatero writes, as translated by Reuters.
"Merkel asked me if I was willing to ask for a preventive credit line of €50 billion from the IMF, while another €85 billion would go to Italy. My response was also direct and clear: 'No'."
Merkel and then French President Nicolas Sarkozy at the same event pressured former Greek leader, George Papandreou, not to hold a referendum on the austerity measures accompanying the second Greek bailout. Papandreou soon after stepped down, citing extreme pressure from EU leaders to reach a political deal with the opposition on the second rescue package.
Zapatero also resigned a month later, saying he did not want his low approval rating to damage his party in upcoming elections.
In his book, Zapatero also publishes a confidential letter from former ECB chief Jean-Claude Trichet dating back to 5 August 2011.
It outlines a series of reforms which were later implemented by the centre-right Spanish government of Mariano Rajoy.
The ECB at the time helped out Spain, as well as Italy, by buying up "significant" amounts of government bonds. This helped push down Rome and Madrid's borrowing costs, which were soaring not only due to their own economic slump, but also due to contagion from Greece.
While he was in office, Zapatero consistently denied the existence of Trichet's letter.
Asked about the publication of the Trichet letter, ECB chief Mario Draghi on Thursday declined to comment on "internal matters" in Spain.
Back when Draghi was the head of the Italian central bank, he co-signed a similar Trichet letter urging Italy's former leader, Silvio Berlusconi, to make reforms in return for ECB help.
In the end, Spain avoided a full-blown bailout, but did require financial assistance from the eurozone for its troubled banking sector. Zapatero says that if he had caved in to Merkel and agreed to a state rescue, Spain would be worse off than it is today.
As for Italy, its then finance minister Giulio Tremonti in 2011 said he could "think of better ways to commit suicide" than agreeing to an EU bailout.
Rome avoided a rescue, but Berlusconi, like Zapatero, stepped down.
Meanwhile, its crushing debt and sluggish economy required cheap loans from the ECB and the promise of unlimited intervention on bond markets if needed.
3 comments:
To benefit from volatility you have to be long convexity, and therefore long the market (given the convex nature of a long position in a limited liability corporation).
Volatility destroys short convex (or concave) portfolios, as do market predators. LTCM, et al.
But talking up your positions, when you are a "guru", can boost returns !
The coldest temperatures in almost two decades will spread into the northern and central US today behind an Arctic cold front. Combined with gusty winds, these temperatures will result in life-threatening wind chill values as low as 60[F] below zero [51C below zero].
In weather that cold – which would break records set two decades ago – frostbite can set in on uncovered skin in a matter of minutes, Reuters reported.
The NWS said the widespread chill was a result of a relatively infrequent alignment of weather conditions, allowing the Arctic “polar vortex” to be displaced unusually far south. But the unusually cold weather will get back to normal by the end of the week.
Forecasters warned Chicago and Indianapolis could see overnight lows of -12F (-24C), Minneapolis -29F (-34 C) and Fargo, North Dakota, -31F (-31 C). The coldest temperature reported in the US (excluding Alaska and Hawaii) on Sunday was minus -40F (-40 C) in the towns of Babbitt and Embarrass, Minnesota, according to the National Weather Service.
Between six inches and a foot (15-30 cm) of snow was predicted from Chicago to Detroit, AccuWeather said, while icy sleet and rain was forecast for much of the north-east, where a brief thaw was forecast before intense cold returned late Monday.
Romania's supreme court has sentenced former Prime Minister Adrian Nastase to four years in prison for taking bribes.
He was also given three years for blackmail, to run concurrently. The court found that two Romanian officials had helped Nastase to get Chinese goods for private properties in 2001-2004.
His wife Dana Nastase got a three-year suspended sentence for collusion.
Adrian Nastase survived a suicide attempt in 2012, just after getting a two-year jail term in a separate case.
In the ruling on Monday the court found that Nastase, 63, had received Chinese building materials and furnishings worth 630,000 euros (£521,000; $856,000) from a construction entrepreneur, Irina Jianu.
In return, he had appointed her head of the State Construction Inspectorate.
Jianu is already in prison, having been found guilty in the previous corruption case involving Nastase.
The former prime minister left prison only 10 months ago, after serving two-thirds of his previous two-year sentence for corruption.
Nastase was also found guilty of having blackmailed a former Romanian consul in Shanghai, Ioan Paun, in connection with the Chinese shopping spree.
Nastase denies wrongdoing, saying the cases against him were politically motivated.
Romania joined the EU in 2007 and remains under special monitoring by Brussels because of EU concerns about high-level corruption.
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