Arab Today, arab today euro zone ministers meet amid fears of euro breakup
Last Updated : GMT 12:59:24
Arab Today, arab today
Arab Today, arab today

Euro zone ministers meet amid fears of euro breakup

Arab Today, arab today

Arab Today, arab today Euro zone ministers meet amid fears of euro breakup

Brussels - Arabstoday

Euro zone finance ministers streamed into Brussels on Tuesday in a desperate bid to save the 17-nation euro currency — and to protect Europe, the United States, Asia and the rest of the global economy from a debt-induced financial tsunami. Most officials agree that, in the race to save the euro, there is no time to lose, but all of a sudden it seems there are more leaks in the dike than there are fingers. And it’s not just a currency used by 332 million people that is at stake. As German Chancellor Angela Merkel and others have said, if the euro fails, so too does the 27-nation European Union, a rousing diplomatic success that united a continent ripped apart by two World Wars. If the Euro fails, bank lending would freeze, stock markets would likely crash, and Europe’s economies would crater. Nations in the euro zone could see their economic output fall temporarily by as much as 50 percent, according to UBS forecasters. The financial and economic pain would spread west and east as the US and Asia get ensnared in the credit freeze and their exports to Europe collapse. In all, it’s a scenario far more dire than even the devastating 2008 credit crunch after the US mortgage debacle. “If Europe is contracting, or if Europe is having difficulties, then it’s much more difficult for us to create good jobs here at home,” President Barack Obama said Monday as he met EU officials in Washington. At the top of Tuesday’s agenda is finding a means to integrate the euro zone’s disparate nations — ranging from powerful Germany to tiny Malta — much more fully, both politically and financially. And the ministers must do it fast, without the delays caused by democratic niceties like time-consuming referendums. France’s finance minister, Francois Baroin, said Tuesday on France-Info radio that countries should integrate their budgets more closely and monitor each other’s spending. “We have to modify euro zone governance. We definitely have to move toward more integrated budgetary consolidation, fiscal convergence with our neighbors,” Baroin said. He said France and Germany will make proposals on how euro zone countries can monitor each other under such a new system. The market doubt that is now engulfing Europe has brought home one hard lesson: It is impossible in the long term for a common currency to survive without common economic rules. The 17 euro zone finance ministers will discuss jointly issuing so-called eurobonds — an all-for-one, one-for-all way of having the different countries guarantee each others’ debts. Right now each nation issues its own bonds, and each must pay wildly differing borrowing rates. Three small EU nations — Greece, Portugal and Ireland — are surviving only on bailouts, already shut out of international bond markets. Two large debt-strapped euro zone nations — Italy and Spain — are roaring closer to being shut out of bond markets as well, but their economies are too large for Europe to bail out. Having stronger countries like Germany stand behind the general European debt would in theory prevent weaker countries like Italy from having to pay higher and higher borrowing rates — and perhaps avoid a debt spiral that leads to a national bankruptcy. But it would also almost certainly increase Germany’s very low cost of borrowing — and for that reason Germany has been fiercely resisting the eurobond proposal. Press reports have said German officials are proposing that the six euro zone countries who have the top AAA credit rating jointly issue bonds. But that proposal — which Germany subsequently denied putting forward — has drawn boos from the European Commission, the EU’s executive arm. Having the EU divided into euro-using and non-euro-using countries is bad enough, critics of the German plan argue. Further fragmenting the euro zone into strong countries and weak countries would benefit no one, they say. French minister Baroin did not comment on the possibility of joint bonds for Europe’s strongest economies, but said those economies could act as a “necessary shield” to keep heavily indebted countries from bringing the rest of the common currency down. Also high on the agenda Tuesday is much stronger central fiscal governance for those countries that use the euro — integration with enough teeth that authorities at European Union headquarters in Brussels could demand changes in national budgets and impose penalties on countries whose deficits were too big. Ceding even a little control over national budgets involves ceding some national sovereignty — a tough sell to voters. And the officials will hear a report from Klaus Regling, the head of the European Financial Stability Facility — the fund that is supposed to be a firewall against financial contagion, the frightening phenomenon of market doubt spreading from one country to another. In October, the 27 European heads of government “decided” to increase the lending capacity of the fund, known as the EFSF, from €440 billion ($587 billion) to €1 trillion ($1.3 trillion) But that increase in firepower remains only a theoretical construct. Significant investors in the fund have not yet been found. Meanwhile, the financial contagion seems almost impossible to check as it spreads from one country to the next. Greece is in dire trouble, then suddenly the markets have doubts about Italy, then even Germany is having trouble borrowing at the low interest rates to which it has become accustomed. Over one 24-hour period last week, the credit ratings for Hungary, Portugal and Belgium were all downgraded. Privately, EU officials have told The Associated Press that the best Europe can hope for is a decade of slow growth and pain, with the euro holding together. The worst? Breakup of the euro, with bank runs, recession and misery.

arabstoday
arabstoday

GMT 21:31 2017 Wednesday ,18 October

Bahrain Bourse daily trading performance

GMT 16:08 2017 Saturday ,14 October

US stocks rise on strong retail sales; Europe mixed

GMT 04:42 2017 Saturday ,14 October

Egyptian Bourse gains EGP 2.6 bn

GMT 04:32 2017 Saturday ,14 October

US stocks rise on strong retail sales; Europe mixed

GMT 20:52 2017 Thursday ,12 October

Egyptian Bourse loses EGP 3 bn

GMT 13:12 2017 Thursday ,12 October

Bahrain Bourse daily performance
Arab Today, arab today
Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today euro zone ministers meet amid fears of euro breakup Arab Today, arab today euro zone ministers meet amid fears of euro breakup

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today euro zone ministers meet amid fears of euro breakup Arab Today, arab today euro zone ministers meet amid fears of euro breakup

 



Arab Today, arab today
Arab Today, arab today Arab tradition glitters in Colombia

GMT 12:59 2017 Thursday ,19 October

Arab tradition glitters in Colombia
Arab Today, arab today Second US judge orders freeze

GMT 08:04 2017 Thursday ,19 October

Second US judge orders freeze
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Writing's on the wall for Trump, Zuckerberg

GMT 09:05 2017 Thursday ,19 October

Writing's on the wall for Trump, Zuckerberg
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Climate-disrupting volcanoes helped topple

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Hussein Fahmy happy for honoring in festival

GMT 07:47 2017 Tuesday ,17 October

Hussein Fahmy happy for honoring in festival
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power

GMT 09:31 2017 Monday ,16 October

Dalal Abdel Aziz happy for “Seventh Neighbor”

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 18:29 2017 Sunday ,03 September

Designer produced new set of ornaments

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 23:42 2017 Monday ,16 October

Better Marriages Make

GMT 06:52 2017 Monday ,16 October

Airbus CEO says won't cling to job

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 19:29 2017 Tuesday ,29 August

Yomna: decoration leaved positive effects
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday