Japan Quake, Euro Debt Crisis Cloud Recovery, Wang Says

Japan’s earthquake and tsunami, the European debt crisis and turmoil in the Middle East are adding uncertainty to the global economic recovery, China’s Vice Premier Wang Qishan said at a Group of 20 Nations seminar today.

Euro Region Is Prepared for Any Debt-Crisis ‘Turbulence,’ Asmussen Says

German Deputy Finance Minister Joerg Asmussen said the euro region is prepared for any financial-market “turbulence” resulting from the bloc’s sovereign-debt crisis.

“We have the strengthened Stability and Growth Pact, we have the euro-plus pact for competitiveness, we have the design of the permanent crisis-resolution mechanism, the ESM,” Asmussen said in an interview on his way to China, where German officials will participate in Group of 20 talks tomorrow in Nanjing. “We will explain the results in detail to our partners. We are well-suited for turbulence that may arise in financial markets.”

Another euro crisis scalp

The Portuguese parliament's rejection of another austerity package left the Socialist Party leader with no choice but to resign.

This week's resignation of Portuguese Prime Minister Jose Socrates, following the rejection of his government's austerity package by parliament, is the second major scalp to be claimed by the crisis gripping the eurozone periphery.

Ireland tax battle adds layer to euro debt crisis

LONDON (MarketWatch) — Ireland’s low corporate tax rate isn’t responsible for Europe’s debt woes, but a battle over the levy is adding yet another layer of uncertainty to the euro-zone’s long-running sovereign debt crisis.

The Irish 10-year government bond yield pushed above 10% Thursday, while short-term two-year yields also traded near double digits, underlining fears that the 85 billion euro ($120.1 billion) European Union-International Monetary Fund bailout provided last autumn won’t be enough to ensure Dublin avoids default.

Irish Notes Slump, Portugal Bonds Drop as Debt Crisis Deepens

March 23 (Bloomberg) -- Irish two-year notes slumped, leading the bonds of the region’s most-indebted nations lower, on concern a permanent solution to the fiscal crisis will elude European Union leaders meeting at a summit starting tomorrow.

The declines drove the yield on the Irish security to more than 10 percent for the second consecutive day, while the extra yield investors demand to hold the nation’s 10-year bonds instead of German bunds climbed to a record. Portuguese bonds slid as Prime Minister Jose Socrates faces a vote today against his deficit-cutting plan that may spur early elections and the need for an EU bailout.

Romania, the European country with the highest drop in IT market during the crisis

The sales of electronic and IT products were last year almost 1,234 million euro, half against the maximum reached in 2008 and with one billion euro less ( 44.4%) against 2007, the best year for the Romanian economy. It is the highest drop recorded by one of the 18 European countries where the GFK company researches the market of long-lasting goods.

How Germany can avoid a two-speed Europe

The “euro crisis” is generally seen as a currency crisis, but it is also a sovereign debt and, even more, a banking crisis. The situation is complex. The complexity has bred confusion, and this has political consequences. Europe’s various member states have formed widely different views and their policies reflect their views rather than their true national interests. The clash of perceptions carries the seeds of serious political conflicts.
The solution that is about to be put in place will, in effect, be dictated by Germany, without whose sovereign credit no solution is possible. France tries to influence the outcome but in the end must yield to Germany because its triple A rating is dependent on being closely allied with Germany.

European leaders boldly decide to carry on muddling through

A BARGAIN, but not a grand one. Euro-zone leaders surprised many on March 12th by agreeing on the main elements of a deal to salve Europe’s sovereign-debt crisis. With negotiations becoming fractious and markets unnerved by further ratings downgrades on Greek and Spanish debt, there had been fears that a deal might not be reached by a deadline of March 25th, when Europe’s heads of governments conclude their next meeting in Brussels. In the event, a special summit of euro-area leaders hammered the essentials out two weeks ahead of schedule.

UK banks face euro zone debt restructure risk-FSA

LONDON, March 17 (Reuters) - Britain's banks are in better health than they
were two years ago at the height of the financial crisis but still face risks like a possible debt restructuring in peripheral euro zone states, the Financial Services Authority said on Thursday.

The UK watchdog said in its prudential risk outlook, which shapes how it will spend its budget to supervise banks over the coming year, that lenders are not in the clear yet.

George Kerevan: Achilles' heel could trigger a fresh eurozone crisis

LAST week in this column I anticipated the summit meeting of the 17 heads of the eurozone, held in Brussels on Friday.
This get- together aimed at nothing less than a root-and-branch reform of how the euro currency area operates - which explains why I was sceptical that very much would be achieved.

On the one hand, the summit desperately needed to agree a permanent successor to the European Financial Stability Facility, the temporary bailout mechanism the eurozone introduced last year to keep Greece and Ireland from defaulting on their sovereign debts.

Growth Worries Get in Euro’s Way

In the aftermath of Japan’s crisis, the euro has not only fallen against the yen but failed to make any headway against the dollar.

Go figure.

If anything, the compromise decision by European Union leaders to extend the European Financial Stability Facility and perhaps bring an end to the sovereign-debt crisis should make an early rise in euro-zone interest rates more likely.

EU officials, euro zone finmins meet on crisis

European Union officials and finance ministers from the 17 countries that share the euro met on Monday to discuss details of an agreement among leaders at the weekend aimed at strengthening the euro zone bailout fund and resolving a year-long debt crisis.

The deal involves increasing the effective capacity of the bailout fund to 440 billion euros, allowing it to buy bonds in the primary market, and softening the terms of a bailout already made to Greece by lowering the interest rate and lengthening the maturity of the loans.

Euro leaders surprise with crisis deal

By GABRIELE STEINHAUSER

BRUSSELS

Eurozone leaders say they have agreed on the cornerstones of a comprehensive solution to the currency union's crippling debt crisis.

EU President Herman Van Rompuy says governments will boost the effective lending capacity of the region's bailout fund to euro440 billion.

EU leaders reach deal on debt crisis

European leaders reached agreement in the early hours of this morning on how to tackle the debt crisis afflicting the nations using the single currency, with significant concessions from Germany.

Eastern Europe Uses Greek Crisis as Cover to Delay Move to Euro Discipline

The euro-region debt crisis is giving Poland, the Czech Republic and Hungary an excuse to delay getting their economies in shape to join the single currency.

The European Union’s largest eastern members are slowing euro preparations as western governments struggle to end a debt crisis that nearly ripped the currency apart in May. Without a fixed timetable, buying the bonds of these countries is no longer a one-way bet on falling yields, said investors including Jean-Dominique Butikofer, who helps oversee about $1 billion of emerging-market debt at Union Bancaire Privee in Zurich.

Europe: Odds taken on death of the euro

Confidence in the single currency has been falling since the eurozone debt crisis swept through Greece and Ireland last year – but this has opened up some interesting areas for traders.

“The eurozone crisis has increased volatility in the region and has created significant trading opportunities,” says Paul Inkster, head of product at Barclays Stockbrokers. “The euro is always a popular currency trade and this crisis has only served to reinforce that trend.”

EU summit to take only minor steps on debt crisis

Euro zone leaders will take the next cautious steps in their year-long effort to quell the region's debt crisis at a summit on Friday, but the meeting is unlikely to produce a breakthrough.

The top item on the agenda for the 17 heads of state and government is to agree a "competitiveness pact," a deal Germany and France are pushing the rest of the euro zone to adopt to show their commitment to overhauling their economies.

Euro crisis set to return?

While investors are preoccupied with political turmoil in the Middle East and rising oil prices, an old problem festers.

If you were wondering what the next shoe to drop was, well here it is: The European Central Bank's "strong vigilance" against rising inflation will likely result in higher interest rates as soon as next month. I talked about that in my last blog post.

Misunderstanding the euro crisis

When France and Germany laid out a “pact for competitiveness” – visibly designed as a quid pro quo for German assent to more effective solutions to the eurozone debt crisis – they were seen as running roughshod over other nations and over the European Union’s spirit of community and solidarity. On Thursday came the response from the most ardent of European integrationists, in a Financial Times comment article by former Commission presidents Jacques Delors and Romano Prodi, and Belgian ex-prime minister Guy Verhofstadt. Both proposals champion the long-standing wishes of their authors. Neither remotely addresses Europe’s current challenges.

Eurozone to consider closer economic scrutiny

Eurozone countries could get a far greater say in each others' economic policies, according to draft documents seen by the BBC.

They would also have to make "concrete commitments" on economic targets, which would be reviewed every year.

These moves, and a closer co-ordination of fiscal measures, will be discussed later this month at a meeting of eurozone leaders, the papers suggest.

‘Oil prices, euro zone debt crisis downside risks to growth story’

A day after painting prospects of a 9 per cent GDP rate in 2011-12, finance minister Pranab Mukherjee outlined internal and external challenges such as soaring oil prices and high inflation that could pose a threat.

“The challenge before the government and the Reserve Bank of India has been to support the growth process without compromising on price stability,” Mukherjee said at the annual general meeting of industry chamber Ficci on Tuesday. “The task has not been easy, but we are making progress.”

George Soros: Euro debt crisis is spreading

Notable investor and businessman George Soros has commented in the World Economic Forum that the debt crisis in the euro zone is not going to end soon. He pointed out that Europe is currently divided into two economic blocks and the economically stronger countries comprising of Germany and France are ahead of the weaker nations like Romania by miles. This split can very well take its toll on Europe. He virtually echoed the opinion of Nouriel Roubini who recently said that the debt crisis, instead of being over, is going to spread to the other parts of the continent.