Euro meltdown: Nicolas Sarkozy flies into Berlin for crisis talks with Angela Merkel

Euro meltdown: Nicolas Sarkozy flies into Berlin for crisis talks with Angela Merkel 

By ALLAN HALL

French President Nicolas Sarkozy today flew to Berlin for a summit with Angela Merkel aimed at forging a common stance on the Greek rescue package as the eurozone lurches closer to collapse.

Chancellor Merkel telephoned the French president on Tuesday night after she said that Thursday's summit was unlikely to deliver the 'silver bullet' necessary to fix the debt engulfing weak countries that use the euro

Mrs Merkel, who is increasingly agitated at Germany being called upon to be the main bailout partner for countries like Greece, Ireland and Portugal, is seen by her countrymen as increasingly weak and without direction.

http://www.dailymail.co.uk/news/article-2016775/European-debt-crisis-Nicolas-Sarkozy-jets-Berlin-talks-Angela-Merkel.html

Markets Fret About Euro 'Slow-Motion Car Crash'

Markets Fret About Euro 'Slow-Motion Car Crash'

By: Catherine Boyle
Web Producer, CNBC.cm

Reports that Greece has not met any of the fiscal targets set by the International Monetary Fund (IMF) and the European Union (EU) as part of its 110 billion euros ($157 billion) bailout knocked down the euro Monday, as other countries in the euro zone are threatened with being dragged into the Greek morass.

The IMF could withhold its portion of June’s 12 billion euros payment unless Athens can prove it can meet all its financing requirements for the next 12 months.

“It’s high noon again in Europe and the gun is to Greece’s head,” Jan Randolph, Director of Sovereign Risk, IHS Global Insight, told CNBC.com. “The single biggest issue is: Are they going to get the funding?”

http://www.cnbc.com/id/43214540

Euro zone's sovereign debt crisis escalates

Euro zone's sovereign debt crisis escalates

Europe Acts to Contain Debt Crisis
 Reassurances Fail to Stem Fears That Woes Will Infect Portugal and Spain; EU-IMF Aim to Wrap Up Irish Aid Package

BERLIN—The euro zone's sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors' fears.

Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety surrounding the country's fiscal position Friday, saying there was "absolutely" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union. But his attempt to calm the markets had little effect, with the euro tumbling and the selloff in Spanish and Portuguese sovereign bonds continuing.

Europeans Clash on Bailout Zapatero Rules Out Rescue for Spain Ireland's Austerity Fails to Ease Fears Heard: Belgium Is the One to Watch How a Lack of Market Confidence Spreads The Source: The Euro is Totally Fine. Honest. Complete Coverage: Euro Zone Crisis Sovereign Debt Watch "If we continue to see the recent trend in Spanish bond yields then the crisis is going to be taken to a completely new level, as Spain accounts for approximately 11.7% of euro-zone [gross domestic product] which is pretty much double the figure of Ireland, Portugal and Greece [combined]," said Gary Jenkins, head of fixed-income research at Evolution Securities.

MORE: http://online.wsj.com/article/SB10001424052748704693104575638132375883318.html?mod=WSJ_hp_LEFTTopStories

Euro under siege as now Portugal hits panic button

Euro under siege as now Portugal hits panic button

By Bruno Waterfield and Robert Winnett, The Daily Telegraph

Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTqDLrZ

The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a "high risk" of requiring an international bail-out.

Portugal became the latest European nation to admit it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.

Greece also disclosed that its economic problems are even worse than previously thought.

Angela Merkel, the German Chancellor, raised the spectre of the euro collapsing as she warned: "If the euro fails, then Europe fails."

European finance ministers will meet in Brussels on Tuesday to begin discussions over a new European stability plan that is expected to result in billions of pounds being offered to Ireland, Portugal and possibly even Spain.

Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTWcnlK

Hungary : Can you say domino ?

Hungary's deficit talk rattles financial markets

Jun 4, 1:54 PM (ET)

http://apnews.myway.com/article/20100604/D9G4JRR80.html

BUDAPEST, Hungary (AP) - Hungary's currency, bonds and stock market reeled Friday as the new government tried to reassure investors that it was not about to slide into a Greek-type crisis despite official comments that the economy was in serious trouble.

Fears that the economic peril could spread weighed heavily on the euro. The currency dropped below $1.20 for the first time in more than four years, falling to as little as $1.1994 in late European trading before edging back up to $1.2006. That was its lowest level since March 2006.

On Thursday, Lajos Kosa, deputy chairman of the governing Fidesz party, said Hungary was facing a Greece-like financial meltdown. And former Fidesz finance minister Mihaly Varga said the deficit could reach 7-7.5 percent of GDP, about twice as much as planned for 2010 by the previous government.

The new government was sworn in Saturday and its talk about a massively revised budget gap was eerily similar to the situation in Greece. There, the 2009 deficit went from a planned 3.7 of GDP to 13.6 percent of GDP by year's end and led to the financial crisis, which saw Greece get a euro110 million ($134.95 million) rescue package from the European Union and the International Monetary Fund to save it from bankruptcy.

International markets reacted quickly to the parallels drawn between Hungary and Greece, evidence that concerns about budget deficits in Europe continued to worry the markets.

http://apnews.myway.com/article/20100604/D9G4JRR80.html

"psychology of looming collapse”

Greece turns on EU critics

By Kerin Hope in Athens, Quentin Peel in Berlin and Tony Barber in Brussels

http://www.ft.com/cms/s/0/3cfeab9e-1813-11df-91d2-00144feab49a.html

Published: February 12 2010 20:32 Last updated: February 12 2010 20:50

Greece on Friday unleashed a fierce attack on its European Union partners, accusing them of creating a “psychology of looming collapse” a day after they pledged support for the country’s crisis-hit government.

George Papandreou, Greek prime minister, said that, in the eurozone’s first big test, Greece had become “a laboratory animal in the battle between Europe and the markets”.

In a televised address to his cabinet, he criticised EU members for sending “mixed messages about our country . . . that have created a psychology of looming collapse which could be self-fulfilling”.

Mr Papandreou blamed the George Papandreou, Greek prime minister for failing to crack down on the previous conservative government’s “criminal record” in falsifying statistics. “This has undermined the responsibility of the European institutions with international markets,” he said.

His outburst is likely to infuriate the very leaders whose help Mr Papandreou needs. It came as it emerged there would be no more talk of financial assistance until Athens had persuaded the EU that it had a sustainable austerity programme in place.


Deepening slump

Greece’s recession has been deeper than reported, with the fourth quarter of last year seeing another turn for the worse – raising more doubts over whether it can meet its targets of cutting public-sector deficits. Greek gross domestic product contracted by 0.8 per cent in the final three months of last year, by far the sharpest decline reported so far by a eurozone country.

That followed declines of 1 per cent, 0.3 per cent and 0.5 per cent in the first, second and third quarters of the year.

Previous estimates had shown falls of 0.5 per cent, 0.1 per cent and 0.4 per cent. The pace at which Greek GDP dropped last year could also cast doubt on the government’s prediction that GDP will fall by just 0.3 per cent in 2010.

Germany is insisting Athens bears initial responsibility for restoring confidence in Greece. Angela Merkel, German chancellor, resisted French efforts to come up with an explicit bail-out package at Thursday’s summit of EU leaders in Brussels.

Officials in Paris said Ms Merkel’s insistence on additional efforts by Greece to cut its budget deficit came close to thwarting agreement at the summit. According to sources in Athens, she called for a rise in Greek value-added tax of 1 per cent, in addition to extra spending cuts. Herman Van Rompuy, EU president, drafted a compromise before the summit started.

Ms Merkel’s tough stance has overwhelming political and popular support in Germany.

Government officials say they are also constrained by constitutional court rulings, which insist on strict adherence to fiscal and monetary stability criteria in the eurozone .

http://www.ft.com/cms/s/0/3cfeab9e-1813-11df-91d2-00144feab49a.html

European single currency is facing an 'inevitable break-up'

Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief

By Sam Fleming and Tim Shipman

http://www.dailymail.co.uk/news/worldnews/article-1250433/Greece-debt-bailout-EU-leaders-split-euro-crisis.html

Last updated at 1:07 PM on 13th February 2010

The European single currency is facing an 'inevitable break-up' a leading French bank claimed yesterday.

Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc.

The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a 'double-dip' recession in the embattled zone.

http://www.dailymail.co.uk/news/worldnews/article-1250433/Greece-debt-bailout-EU-leaders-split-euro-crisis.html

Greek Economy faces the Battle of Thermopylae

Does the Greek financial crisis signal the beginning of the end for the EU ?