EFSF's Regling Says Reforms Will Strengthen Euro Area

Planned stronger surveillance of government budgets will ease the European Union's debt crisis and lead to more jobs in the single currency area, the chief executive of the European Financial Stability Facility, the euro zone's bailout fund that was tapped by Ireland last year, said Wednesday.

Is EMU Debt Crisis Morphing Into a Euro-Positive Force?

We argue that a key driver lifting the euro has been the divergent monetary policies of the Federal Reserve and the ECB. When investors perceive the European debt crisis becoming acute, it has eclipsed the main driver and weighed on the euro episodically in recent months. However, the increased speculation (and therefore risk) that Greece restructures its debt may be transforming the debt crisis into a more immediately euro-positive direction.

Dollar Isn't in a Crisis, but a Rout Could Come Quickly

The dollar has yet to descend into a full-blown crisis but market watchers warn that ultra-loose U.S. monetary policy means that one could quickly materialize if the slide in the greenback gathers pace.

The dollar has dropped to new lows since Federal Reserve Chairman Ben Bernanke effectively slapped a sell sign on the currency Wednesday, with the greenback hitting historic lows against the Australian dollar and Swiss franc, and even to a major low point against the euro, which is hobbled by an ugly debt crisis.

Euro crisis: “the EU is setting itself up for failure”

In a lengthy article posted at Crooked Timber, John Quiggin and Henry Farrell argue that

By concentrating on its economic problems but ignoring their political consequences, the EU is setting itself up for failure. The case for austerity does not make sense. And if the EU fails to deal with the political fallout of its own institutional weaknesses, it is going to collapse. No political body can force voters to repeatedly shoulder the costs of adjustment on their own and expect to remain legitimate. During the gold standard, nation-states tried this and failed—and they had considerably more authority than the EU has today. Hard Keynesianism offers a means to combine fiscal discipline with flexibility in order to cushion the political costs of adjustment in times of economic stress. EU leaders must institute it in a hurry.

Mid-Day Report: EUR/USD Resumes Rally, Shrugs off News on Debt Crisis

EUR/USD breaks last week's high to resume recent rally as dollar weakness returns. USD/CHF dives to new record low of 0.8744 while AUD/USD is back pressing record high of 1.0773. Data from US saw S&P Case-Shill 20 city house price dropped -3.3% yoy in February. Consumer confidence beat expectation and improved to 65.4 in April. Euro is rather unbothered by news on the debt crisis. Sterling, though, was weighed down by much worse than expected CBI trends total orders, which dropped sharply to -11 in April. Swiss trade surplus narrowed to CHF 1.09b in March while UBS consumption indicator improved to 1.66.

Fareed's Take on America's debt crisis: why no problem is the problem

Everyone has been in a panic this week over America's impending fiscal collapse, but I think the reality is that America does not face an immediate debt crisis. Take a look at the simplest indicator, the day that Standard & Poor's raised its now famous warnings about America's debt, markets decided to lower America's borrowing costs and the dollar rose against its principal alternative, the euro.

Analysis: Euro zone may need to rethink anti-crisis strategy

Less than a month after European leaders unveiled a "comprehensive package" they said would fix the euro zone, their anti-crisis strategy is fraying and may be in need of a radical rethink.

Rising public anger in northern Europe at a series of taxpayer funded bailouts is sending tremors through the political landscape, boosting anti-euro parties such as the True Finns in Finland and sparking open policy rows in European paymaster Germany.

Strict rules to prevent future euro crisis

The European Parliament's economics committee yesterday backed a set of laws which will strengthen the EU's powers over member states' budgets and debts as it attempts to prevent a future financial crisis.

The so-called "six-pack" of measures to boost economic governance will give the European Commission a much greater role in policing member states' finances as part of a package to strengthen the Stability and Growth Pact. The proposals were first put forward by the commission and the European Council.

Euro crisis bleak future for ASEAN single currency

Economists and policymakers in euro-adopter countries are experiencing stormy weather outside their office windows.

Early this month the Portuguese government declared its inability to pay its debts and requested financial assistance from the EU. After the economies of Greece and Ireland collapsed last year, Portugal is the third euro-adopter country that has failed to pay its debts and ask for a bailout.

Current arrangements insufficient to ensure neat outcome to euro crisis

Russell Investments' John Velis says Europe's leaders can avoid messy conclusion to euro crisis.

In Europe, our “square-root-sign” recovery still seems like the most probable scenario. In some ways, such a modest trajectory represents a bit of a disappointment.

As we have been saying, the usual recovery after a recession is often sharp and quick, akin to the letter ‘V’. Yet, the 2008 Great Recession, the severest global contraction since the Great Depression, has not been followed by such a steep recovery.

Eurozone crisis as Ireland's credit rating cut again over economy

The crisis in the eurozone deepened yesterday as Ireland’s credit rating was cut to just one rung above ‘junk’ status.

One of the world’s biggest ratings agencies cut Dublin’s status by two grades and warned further reductions may follow – potentially barring investors from buying Irish government bonds should the rating fall further.

Euro Advances on Prospects Debt Crisis Will Be Contained

The euro climbed towards a 15-month high against the U.S. dollar on Thursday on estimations that the cwill be contained, and following disappointing U.S. economic data.

The dollar fell against most of its major currency counterparts today after a report showed that applications for jobless benefits rose by 27,000 in the week ended in April 9 to 412,000, well above expectations for 379,000 claims, said the Labor Department.

Portugal euro crisis? What crisis?

With Portugal on the verge of a massive bailout, will we be paying more for our holidays there? The answer in the short term is ‘No’. While Portuguese austerity tax measures will squeeze ex-pats who are living in the country, tourists will notice very little change, as, in spite of the 80 billion euro bailout, the currency has remained strong against the pound. At present, the caretaker government of Jose Socrates has no measures planned (such as rises in taxes on food or hotels) that will directly affect visitors to the country.

Ireland’s taxpayers must share the pain

The principle of “no taxation without representation” should work both ways. If taxpayers have the right to share in decision-making, they must also accept the consequences. But in Europe this relationship between taxpayers and the financial system is not working.

The euro crisis, Italy and its playful premier

In Las Vegas they call the really big gamblers – the ones whose fortunes can make or break a casino – the “whales”. For the European Union, Italy is the whale – the country whose economy and debts are so large that the fate of the single currency and the EU itself hang on its future.

Travel costs battered by volatility in currencies

ANYONE heading abroad this Easter to visit family on the other side of the world or escape to the sun will have been watching international turmoil with concern at the impact on the cost of their holiday.

The crisis in Portugal, coming after Ireland and Greece, might have been expected to put downward pressure on the euro, bringing relief to UK travellers.

India gold gains on Euro debt crisis

Gold gained and settled at +0.02 at 21166 as the appeal of the precious metal was boosted by lingering concerns over inflation, mounting fears over the euro zone’s sovereign debt crisis and as widespread unrest continued in the Middle East and North Africa.

Precious metals ends higher on Euro debt crisis

Bullions traded heavily backed by the once again erupted Euro crisis where in The European Commission said it isn't in discussions with Portugal over a possible bridge loan giving certain weakness to Portugal.

Which got its rating cut by Moody's Investors Service for the second time in three weeks to Baa1 from A3, This move put the country at the same level as Ireland, Russia, Mexico and Thailand.

Emerging Market Leader Reacts to Massive Bailout Plan Announced by U.S. Government

WASHINGTON – September 20, 2008 -- Today's market increases and the announcement by the U.S. government to undertake a major bailout plan to restore confidence in the world financial system, prompted a rare comment from Alexander Mirtchev.

Foreign exchange: End of the euro exchange rate?

The ongoing debt crisis in the euro area poses a threat to the future of the euro exchange rate suggests think tank.

The euro exchange rate is lower against the majority of major currencies it pairs with.

News out this morning is that the risk is roughly one in seven that Europe's ongoing debt crisis will push member nations to abandon the shared currency.

Politics will bedevil resolving the euro crisis

Last week’s widening in sovereign bond spreads and the results of stress tests on Irish banks have reminded us that the eurozone has made hardly any progress in actual crisis resolution – in spite of its pretentious grand bargain. Over the next few weeks, I will try to map out various scenarios of how the crisis might evolve. It is probably the toughest challenge the European Union has confronted in its history. The eventual outcome will depend on a complex interaction of politics, finance and economics.

Murder on the EU Express

With the monetary union coming apart, the finger-pointing has begun. Who really killed Europe?

You remember Agatha Christie’s classic whodunit Murder on the Orient Express? The problem for the great Belgian sleuth Hercule Poirot was that there were far too many suspects. The strange death of the European Union may prove to be a rather similar case.

ECB rate increases to open policy gap with Fed

THE European Central Bank is poised to raise interest rates faster than the Federal Reserve for the first time in four decades, opening up a transatlantic policy gap that may help the euro endure the sovereign debt crisis.

One way to end Irish crisis — let banks go bust

WASHINGTON (MarketWatch) — Missing in the 88 pages the Central Bank of Ireland has produced in determining that the Irish banking system is undercapitalized by some $34 billion (24 billion euros) is a different way to end the euro-zone nation’s financial crisis.

It’s an elegant and simple solution, and one that could prove cheaper: Let all the banks collapse.