(Reuters, WSJ, BBC - 19/08/11; AP, AFP, RTT News, RFE/RL, VOA, Bloomberg, New York Times, WSJ, Dnevnik.bg - 18/08/11)
Several Eurozone countries suggested they might ask to get collateral in exchange for their contributions to the package of rescue loans for Greece. [File]
Concerns about a pending economic slowdown hit stock markets on both sides of the Atlantic on Thursday (August 18th), with European shares suffering their biggest daily decline since March 2009.
Further fanning the already existing fears, Wall Street investment bank Morgan Stanley warned in a report the same day that the United States and the Eurozone are "hovering dangerously close to a recession -- defined as two consecutive quarters of contraction -- over the next 6-12 months". Both Morgan Stanley and Bank of America Merrill Lynch assess the risk of a new downturn as standing at about one in three now.
EU President Herman Van Rompuy, however, took a different view. "There is no perspective, no forecast for negative economic growth," he said on Thursday. Growth can be lower than expected, lower than anticipated ... but we don't foresee negative economic growth, a recession."
The escalating debt crisis within the 17-nation Eurozone and growing scepticism that European policy makers are able to resolve it are among the factors that have been fuelling anxiety among investors in recent weeks.
Plans for a closer economic integration in the Eurozone were unveiled by German Chancellor Angela Merkel and French President Nicolas Sarkozy on Tuesday, but also failed to appease the markets.
The actions they proposed included an economic government headed by Rompuy, as well as introduction of a tax on financial transactions, harmonised corporate taxes and constitutional commitments to balance budgets.
Investors were however disappointed that the plan did not feature an expansion of the Eurozone's bail-out fund, the European Financial Stability Facility (EFSF), or the issuing of mutually guaranteed Eurobonds.
Describing the German and French leaders' proposals as worthless, former European Commission head Jacques Delors warned in an op-ed published in Belgian daily Le Soir and Swiss daily Le Temps on Thursday that the euro and the EU are each at risk of collapsing.
"Open your eyes: the euro and Europe are on the edge of the precipice," he said. "To avoid falling, the choice looks straightforward to me: either member states accept the robust economic partnership I always demanded, or they transfer more powers to the Union."
Delors criticised European leaders for failing "to see the reality in front of their eyes" ever since the Greek sovereign debt crisis erupted about 18 months ago, and for dragging their feet on the implementation of measures agreed on during crisis talks last month.
Meanwhile, a new hurdle emerged on the way towards the new bailout for Greece on Thursday, when several Eurozone countries suggested they might ask for collateral in exchange for their contributions to the package of rescue loans.
News that Finland had already reached such a deal with Athens on Tuesday, prompted other members of the 17-nation area to also seek a similar agreement with the Greeks.
"It always was our position in the council that if there is a collateral setup, Austria will participate," Harald Waiglein, a spokesman for Austria's finance ministry, told the AP. The Netherlands, Slovakia and Slovenia have also indicated they would push for such a deal.
Source: SETimes.com
0 comments:
Post a Comment