Euro Summit.
Europe Struggles for Crisis Remedy
European leaders “have risen to the challenge,” German Chancellor Angela Merkel said. French President Nicolas Sarkozy proclaimed their July 21 summit a “historic turning point” and Luxembourg Prime Minister Jean- Claude Juncker called it the “final package, of course,” to put out the debt inferno.
Then they went on vacation. Before they returned to work, the deal fizzled.
You have to take your holidays when they come due bugger any crisis that can lead to wars, global financial meltdown etc.
The euro’s stewards are back in Brussels today for an emergency summit struggling to heed the world’s calls to once and for all extinguish what U.S. Treasury Secretary Timothy F. Geithner called the “catastrophic risk” of the debt crisis. A potential Greek default threatens shockwaves that could engulf Italy and France, jolt the banking system and spell havoc for the global economy.
The 14th crisis summit in 21 months starts with a meeting of all 27 European Union leaders at 6 p.m. The real business gets under way at 7:15 p.m. when chiefs of the 10 non-euro nations depart, leaving the rest to hash out a strategy that they already say requires more work.
14 summits in 21 months? This time will be different, errr maybe....
The cancellation of a finance ministers’ meeting to precede the summit underscored the holes in the plan. The finance chiefs will now meet at an as-yet undetermined time after the summit to complete its main elements, including safeguarding banks and writing down Greek debt, according to an EU official.
The finance ministers can't arrange a meeting on a finance crisis?
Global exasperation with Europe’s response is deepening, with politicians from Australia to North America prodding the euro area to get ahead of the crisis before it infects the world economy. A Group of 20 meeting in Cannes, France, on Nov. 3-4 is Europe’s self-imposed deadline.
The weather is nice in Cannes late Autumn and the food and wine terrific.
“We’re currently debating 50 percent to 60 percent in Europe,” Luxembourg’s Juncker said in an interview in Zurich yesterday. “We’ll have parallel talks in Brussels with banks and we’ll need to see what’s the result of a voluntary participation.”
Strikes, tear gas and 120,000 tons of uncollected garbage on the streets of Athens accompanied the Greek parliament’s approval of more austerity measures, as Greek citizens’ tolerance of EU-mandated budget cuts was stretched to the breaking point.
Greece’s bond writedowns will determine the amount of damage to European banks, which need around 100 billion euros of extra capital, the EU estimated last week.
What started in Greece and spread to Ireland and Portugal now stalks Italy, the third-biggest euro economy. European officials expect Berlusconi to show up in Brussels with specifics on containing pension spending and a timeline for meeting deficit-reduction targets.
If the banks take a 50-60% haircut credit will freeze and the remaining PIIGS will want haircuts; If they don't Greece will default and there will be global contagion and credit will freeze; Austerity is bring economic contraction, social breakdown and unrest and you need austerity AND economic growth (like trying to mate a cat with a dog expecting offspring) to Not default.
Mr Bond you have three choices of firing squad, death by hanging or lethal injection.
Berlusconi has yet to complete an austerity package whipped together on an August weekend that led the European Central Bank to start buying Italian bonds. The gains from that support have evaporated. Ten-year Italian notes yield 389 basis points more than benchmark German bunds, the same as on Aug. 4.
Italian Government Collapse Imminent?
And, in Italy last night...
Italian government on brink as debt problems take toll
The Italian government is on the brink of collapse, according to reports, as prime minister Silvio Berlusconi struggles to unite his political coalition into action.
Berlusconi, who leads the Popolo della Libertà party, has been forced by European peers to take action over the country’s burgeoning debt problems.
However, coalition members are at odds over how to cut debts and which austerity measures to pursue.
Umberto Bossi, leader of the Lega Nord and part of Berlusconi’s coalition, states he would not raise the state pension age, saying “people would kill us”.
He explains he would not raise the state pension age to appease the Germans.
At a press conference earlier this week, German chancellor Angela Merkel and French leader Nicolas Sarkozy shared smiles when asked if the Italian prime minister would be able to implement reforms.
Greek Bank Run
Over to Greece, a bank run!
Greek Bank Run Getting Serious – Citizens Queue Up in Greek Banks
On the eve of the second European Summit that will discuss significant haircuts on Greek debt, the citizens of the debt later country are lining up to grab their money.
Greek banks hold a significant amount of Greek debt and they have already experienced a slow bank run. The evidence seen now is not only in the numbers, but also in queues.
“I come here to immediately pick up my pension € 300. Who knows what else happened today. My money is safe only when it is at home” said Pensioners Evagelos Dimitros age 73.This joins a previous report from Bild, a German newspaper, about Greece’s rich moving around 200 billion euros from their accounts in Greece to Swiss banks.
The head of an Athens bank branch told BILD: “More and more Greeks who still have some money come to get it from the bank. In my office there are a total of 5,000 customers, 2,500 of which either have their money transferred abroad or hoard it at home. If this continues, there will soon be no more money.”
England and France
Add a little AngloFrench historical love for one and other.
Sarkozy 'sick' of Cameron interference in euro crisis
French President Nicolas Sarkozy launched a scathing attack on British Prime Minister David Cameron at Sunday's EU summit, saying he was "sick of him telling us what to do," Britain's press reported.
During talks in Brussels to resolve the eurozone debt crisis, the French leader accused Cameron of "interfering in our meetings", British newspapers The Guardian and The Daily Telegraph reported, citing diplomatic sources.
"We're sick of you criticising us and telling us what to do," Sarkozy reportedly told Cameron.
"You say you hate the euro, you didn't want to join and now you want to interfere in our meetings," he added.
Another newspaper, The Times, also reported that a row had erupted, but did not give exact details.
Tempers frayed over Sarkozy's insistence that only the 17 members of the eurozone attend a bank rescue summit meeting hastily arranged for Wednesday, according to the Telegraph.
Cameron convinced those at the meeting that all 27 EU members should be invited, and British newspapers reported on Monday that Cameron had cancelled his planned trips to New Zealand and Japan in order to attend.
US Woes
And the Americans?
US States Are Facing Total Debt of Over $4 Trillion
Monster Prediction From BofA: Another US Debt Downgrade Is Coming In Just A Few Weeks
Is Bank of America preparing for a Chapter 11?
Its all going rather smoothly over there as well. Are the printer's on standby?
Fed’s Yellen: QE3 May Be Warranted
IF (big IF) The Fed starts QE3, the US dollar will resume its journey to the basement and Gold to the moon.
US and China in a trade war?
Lawmakers Seek Tougher Stance on China Trade
To summarise it all, Tick-Tock Goes the Developed World's Debt and Derivatives Clock: U.S. National Debt Fast Approaches 15 Trillion!
Love this post, it's a good summary of what is going on, thanks :)
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