Euro­pean Fi­nance Min­is­ter min­is­ters rule out im­me­di­ate aid for Por­tu­gal, Spain

The Pak Banker - - Front Page -

FRANK­FURT: Euro­pean fi­nance min­is­ters ruled out im­me­di­ate aid for Por­tu­gal and Spain or an in­crease in the 750 bil­lion-euro ($1 tril­lion) cri­sis fund, count­ing on Euro­pean Cen­tral Bank bond pur­chases to calm debt-spooked mar­kets. A week af­ter hand­ing Ire­land an 85 bil­lion-euro life­line, the fi­nance chiefs voiced con­fi­dence that Spain and Por­tu­gal will tame their bud­get deficits and said the ex­ist­ing credit line is enough to de­fend them in an emer­gency.

"It's very dif­fi­cult to calm the fi­nan­cial mar­kets, but we re­peated to­day one more time that we do ev­ery­thing to se­cure the fi­nan­cial sta­bil­ity in the euro zone," Lux­em­bourg Prime Min­is­ter JeanClaude Juncker told Bloomberg News late yes­ter­day af­ter chair­ing the min­is­ters' meet­ing in Brus­sels.

A 22-week high in ECB bond­buy­ing brought a respite from spec­u­la­tive attacks, mask­ing di­vi­sions be­tween the 16 euro-area gov­ern­ments over the next steps to fight the ex­plo­sion of debt that threat­ens the cur­rency.

"As the mar­ket 'wolves' are likely to keep huff­ing and puff­ing, we be­lieve that Euro­pean lead­ers will ul­ti­mately take fur­ther steps rather than have the house blown down," Michala Mar­cussen, head of global eco­nom­ics at So­ci­ete Gen­erale SA in London, said in an e-mailed note. "For now, the ECB re­mains the best line of de­fense."

Ger­many led the op­po­si­tion to an in­crease in the cri­sis-aid fund or the launch of joint bond sales, with Chan­cel­lor An­gela Merkel un­der pres­sure to stave off fur­ther costs for tax­pay­ers in Europe's largest econ­omy. Europe is tak­ing steps to "con­vince the fi­nan­cial mar­kets that we in Europe have a sta­ble cur­rency and will solve the prob­lems," Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble told re­porters be­fore the meet­ings re­sumed to­day. Europe shouldn't "start a new de­bate ev­ery week." Por­tuguese Fi­nance Min­is­ter Fer­nando Teix­eira dos Santos bucked "strong" pres­sure from other min­is­ters to ask for aid, Lis­bon­based Publico news­pa­per re­ported to­day, cit­ing an uniden­ti­fied Euro­pean diplo­mat. Teix­eira dos Santos de­clined to com­ment late yes­ter­day.

While bonds in Por­tu­gal, Spain and Italy fell yes­ter­day, the ex­tra yields over Ger­man bonds re­mained be­low the lev­els of Nov. 28 when the Ir­ish pack­age was an­nounced and the ECB stepped up its buy­ing of govern­ment debt. Por­tu­gal's spread has fallen to 309 ba­sis points from 425 ba­sis points, Spain's to 230 from 244 and Italy's to 165 from 168. "The best de­fense against con­ta­gion is to im­prove our bud­getary po­si­tions to meet the agreed fis­cal tar­gets," Euro­pean Union Eco­nomic and Mon­e­tary Com­mis­sioner Olli Rehn said. "The re­cov­ery is tak­ing hold and is pro­gress­ing but at the same time it is es­sen­tial that we con­tain the fi­nan­cial bush fires so they will not turn into a Europewide for­est fire." -PB News

BRUS­SELS: Rus­sia's Pres­i­dent Dmitry Medvedev (C) is wel­comed by Euro­pean Coun­cil Pres­i­dent Her­man Van Rom­puy (L) and Euro­pean Com­mis­sion Pres­i­dent Jose Manuel Bar­roso (R) ahead of a EU-Rus­sia Sum­mit at Euro­pean Union Coun­cil -Reuters

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.