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发帖数: 1972 | 1 (Reuters) - The European Union has agreed that around 100 billion euros is
needed to recapitalise the European banking system, but deep splits remain
before a high-profile summit on Sunday over how to strengthen the euro zone'
s bailout fund.
Sources in Germany's governing coalition said the European leaders' summit
would not reach a decision on increasing the scope of the European Financial
Stability Facility, the key element financial markets were looking for to
combat the crisis.
Failure on that front could further damage market confidence in the euro
zone's ability to tackle its debt crisis, underscoring how the crisis is
both economic and political, and perhaps more intractable because of that.
Progress was made in other areas.
EU officials said all 27 member states had agreed that just short of 100
billion euros ($138 billion) was required to bolster bank balance sheets, a
substantial step forward in attempts to protect the system against the
threat of a default in Greece or elsewhere.
"The figure has been discussed with member states. It is now acceptable for
everybody," an EU source involved in the discussions said.
Banks will be required to come up with the capital from shareholders first,
and if that fails than national governments will provide the support. Only
as a last resort will the EFSF be used to recapitalise institutions.
A deal on recapitalisation clears one hurdle for leaders ahead of the Sunday
summit, but there remain large areas of disagreement, particularly over how
to scale up the EFSF rescue fund to equip it to defend the likes of Spain
and Italy.
The sources in Germany said Chancellor Angela Merkel would not address the
German parliament before she leaves for Brussels, making an agreement on the
fund impossible at the summit as it will not have the Bundestag's stamp of
approval.
The International Monetary Fund and the EU also do not see eye-to-eye over
the sustainability of Greek debts, with the IMF concerned that EU
projections may be too optimistic and that deeper debt reduction is needed,
EU sources told Reuters.
Despite the differences of opinion, the inspectors are expected to go ahead
and approve an 8 billion euro aid payment to Greece next month, the sixth
tranche from a 110 billion euro package of EU/IMF loans agreed last May.
Without that payment Greece faces default, possibly dragging the larger
economies of Spain and Italy into the mire and sending shockwaves through
the European banking system.
In their effort to agree a comprehensive crisis resolution plan, euro zone
leaders are striving to agree new steps to reduce Greece's debt, strengthen
the capital of banks and leverage the EFSF to stem contagion to bigger
economies.
Analysts say the key element is how to leverage the EFSF, a 440 billion euro
fund set up last year and used to bail out Portugal and Ireland.
French President Nicolas Sarkozy flew to Frankfurt on Wednesday for
emergency talks with German Chancellor Angela Merkel, the head of the IMF
and other top euro zone officials. French media reported he missed the birth
of his daughter in the process.
France has argued the most effective way of leveraging the EFSF is to turn
it into a bank which could use funding from the European Central Bank, but
both the ECB and Berlin oppose this and the proposal now appears to be dead.
Instead, there is an initiative to use the EFSF to guarantee a portion of
potential losses on new euro zone debt, a way of trying to restore market
confidence that Italian and Spanish bonds are safe to buy. By guaranteeing
only a portion, perhaps a third or a fifth, of each debt issue, the EFSF's
funds would stretch 3-5 times further.
Analysts are concerned that such a plan could create a two-tier bond market,
with bonds that have guarantees trading at a premium to the secondary
market -- an outcome that would likely fuel the turmoil markets are already
in.
Markets caught up with the downbeat tone. European shares fell, having risen
this week on hopes of decisive action from euro zone leaders.
The euro weakened on reports that the summit could be postponed, then
rebounded when the reports were dismissed.
"I don't think they can meet expectations. The summit will fall well, well
short of the kind of big bang needed to reassure the markets," said Simon
Tilford, chief economist at the Centre for European Reform in London.
Guidelines for changes to the bailout fund obtained by Reuters confirmed it
will be able to buy bonds on the secondary market once a request from a
country is approved by ECB and euro zone finance officials.
A draft statement for Sunday's summit showed euro zone countries will make
rules to limit budget deficits and public debt part of national legislation
by the end of next year.
But the statement gave no indication of progress on the main areas of
dispute -- particularly the leverage issue. | b*****2
发帖数: 11103 | | d******8
发帖数: 1972 | 3 (Reuters) - Major stock indexes extended losses in midday trading on
Thursday on concerns whether European leaders could reach a deal on further
strengthening the region's rescue fund.
The Dow Jones industrial average .DJI lost 74.47 points, or 0.65 percent, to
11,430.15. The Standard & Poor's 500 Index .SPX dropped 8.40 points, or 0.
69 percent, to 1,201.48. The Nasdaq Composite Index .IXIC fell 33.79 points,
or 1.30 percent, to 2,570.25.
Sources in Germany's ruling coalition said a weekend meeting will not reach
a decision on leveraging the euro zone rescue fund.
(Editing by Kenneth Barry) |
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