Eurozone: Bank resolution proposal gains wider interest

It will be increasingly difficult for Germany to repel the creation of a strong and centrally controlled Single Resolution Mechanism for failing banks, the other pillar of the European Banking Union. Yesterday Vítor Constâncio, Vice-President of the European Central Bank expressed his full and unconditional support for the relevant Commission’s proposal. Understandably the first pillar […]

Eurogroup: IMF proposes Germany disposes

In yesterday’s Eurogroup, Eurozone’s policy setting council, the 17 ministers of Finance had two important items on their agenda; IMF’s recommendations for the European economy under Article IV Consultation with the Euro Area, and the approval of the next loan trance to Greece. On both accounts the opinion of Germany weighed a lot. In this […]

Parliament: No consent to EU budget until €11.2 billion unpaid bills are settled

The Plenary of the European Parliament in a non-legislative resolution accepted the political agreement on the Multiannual Financial Framework (MFF) for 2014-2020 that is the EU proper budgets for the next seven years. Negotiations over the next MFF commenced last February after the summit of the 27 leaders set the limit for the seven-year EU total […]

An EU Summit without purpose

The most important news from the first day of the 27+1 EU leaders’ gathering (European Council) yesterday was that the Ecofin council of the 27 ministers of Finance managed to come up with an agreement over the bank resolution and recovery, and also that the EU Parliament agreed with the Commission on the Union budgets […]

EU Commission: Banking and energy conglomerates don’t threaten competition!

At a time when the financial sector in the eyes of the wider public all over the world, and more so in Europe and the US, is to be held responsible for the real economy crisis and the unemployment burst, the European Commission dares to approve the acquisition of NYSE-Euronext (NYX) by the InterContinental Exchange. […]

Azeri natural gas will keep the EU warm soon

Ilham Aliyev, the President of Azerbaijan was in Brussels on Friday 21 June for a good reason. The giant state oil and gas company of his country, Socar, has reportedly agreed with the Greek authorities to acquire the National Natural Gas System Operator (DESFA) S.A. of Greece, owner and operator of the country’s natural gas […]

Lies and reality about incomes and wealth in the EU

The European Central Bank in April this year produced a statistical paper on the distribution of real household wealth in Eurozone countries. The study argued that in terms of net wealth the average German household appears much poorer than their counterparts in the crisis hit countries of south Europe, that is Greece, Cyprus, Spain, Italy […]

No agreement in sight on EU budget

In less than 24 hours the European Parliament answered in force a self-congratulating Press release issued by the Irish Presidency, falsely announcing a major breakthrough in the negotiations over the EU budgets for the next seven years. It’s about the Multiannual Financial Framework 2014-2020 that provides for the ceiling of the overall EU spending during […]

Schaeuble wants IMF out and bailouts ‘a la carte’ with Germany only to gain

Wolfgang Schaeuble, the German Minister of Finance issued an appeal yesterday to European partners to do together whatever it takes, in order to push the International Monetary Fund out of the European Union. Four years ago it was again Schaeuble and Germany the ones who demanded the cooperation of IMF in the first bailout of […]

EU Commission challenges Berlin by proposing breakthrough legislation on banks

In an inspired speech last Friday, in Helsinki the European Commissioner Michel Barnier, speaking at the 4th Annual Economic Forum, made crystal clear that the Commission has not abandoned the target of a strong and effective European Banking Union. He stressed that “We cannot have a genuine Economic and Monetary Union without a Banking Union”. […]

Has Germany rebuffed ECB on the banking union?

The leadership of the European Central Bank took yesterday a step back from its strong presence in the public discussion over the depth and the strength of the under construction European Banking Union (EBU) and more precisely the single bank resolution authority. Both its President and Vice President Mario Draghi and Vítor Constâncio had very […]

Commission: New proposal for centrally managed bank resolution

The European Commission is about to honour once more its title as ‘Guardian of the Treaties’. This fundamental Commission’s mandate obliges the EU’s executive to always promote more rather than less Union. In this respect after the French President Francois Hollande and the German Chancellor Angela Merkel agreed in Paris last week, to support a […]

Poverty and social exclusion skyrocket with austerity

Proportion of the population at-risk-of-poverty or social exclusion, 2011 Social exclusion and poverty has been a constant danger for a very large part of our modern western societies. It is understandable that while the economies grow this danger recedes and the opposite is true in recession. To measure however the danger of social exclusion and […]

EU Commission and ECB rebuff Germany on the Banking Union

Michel Barnier the European Commissioner responsible for the Internal Market and Services in a clear-cut way broke yesterday Commission’s silence and joined the European Central Bank’s approach, over the creation of an effective European Banking Union, able to guarantee that failing or about to fail banks will be duly resolved or managed by one central […]

ECB settles the bank resolution issue, makes banking union tangible

The enactment of the European Banking Union emerges now as the next statutory step for Eurozone and the European Union as a whole, if the block is to continue as a solid entity or starts unravelling during the next credit crisis, which might not be very far away. In any case the European Central Bank […]

Eurozone: There is a remedy for regional convergence

Regional unemployment statistics in the European Union as published today by Eurostat, the EU statistical service, show clearly that the wide differentiation of this crucial variable calls for an appropriate modulation of policies designed to counter different growth/recession records. The European Central Bank is currently supplying ample and almost zero cost liquidity to Eurozone’s core […]

Italy’s Letta: A European Banking Union soon or Eurozone collapses

While the European Council of the 27 EU leaders has only ‘energy’ and ‘taxation’ in its agenda today, with poor results expected on both accounts, the hot issue of the European Banking Union will probably consume most of the time in the side meetings. The enactment of the EBU has become now the main point […]

German heavy artillery against Brussels and Paris

In Eurozone the confrontation between ‘austerity lovers’ and ‘relaxationists’ presented a new and course changing sequel last week, with German heavy artillery fire towards Brussels and Paris. The German Federal Minister of Finance, Wolfgang Schäuble, accused the Brussels Commission and personally the President Manuel Barroso for delaying the realisation of EU programmes to fight youth […]

Germany openly seeks more advantages for its banks

The Commission proposal for a Bank Resolution and Recovery Directive divided deeply the Ecofin council in its yesterday’s Brussels meeting. Again the division took the form of North versus South or rather Germany & Co against everybody else. Mr Wolfgang Schauble, the German Federal Minister for Finance, insisted that the line of funds to be […]

Eurozone: How safe are our deposits? Which banks will survive?

The Ecofin Council, the EU body that regroups the 27 Ministers of Finance, probably the most powerful institution of the European Union, is to conduct its regular meeting this Monday and Tuesday 13 and 14 May. On its agenda the main item will be a Commission’s proposal for a crucial Directive, establishing a framework for […]

The banks dragged Eurozone down to fiscal abyss

For a long time now economic analysts and commentators have been arguing that government support to financial institutions was the main culpable party of excess fiscal deficits in the Eurozone and the European Union as a whole. Those are direct subsidies under the form of capital injections, quite different from the support to lenders from […]

Draghi, Letta: All Eurozone countries must be able to borrow like Germany

The reduction of European Central Bank’s basic rate from 0.75% to 0.5 % was the less important news from Bratislava, Slovakia, yesterday where the governor of the central bank, Mario Draghi, presented the decisions of the bank’s Governing Council and answered questions from journalists. Not even the possibility of a new interest rate cut soon […]

Hostages to a rampant banking system

The European Commission presented yesterday its European Financial Stability and Integration Report (EFSIR) at a joint conference with the European Central Bank (ECB) in Brussels. Overall, the report concludes that “despite improvements, the financial crisis continued to exert a significant impact in holding back economic growth in 2012”. Earlier today, Friday 26 April, the European […]

Who is to profit from the quasi announced ECB rate cut?

It is probably the first time in the annals of the European Central Bank that its president and vice president went so close as to almost announce the next interest rate reduction. Yesterday ECB’s Vice-President Vitor Constancio, presented the central bank’s Annual Report for 2012 to the Committee on Economic and Monetary Affairs of the […]

Everybody for himself in G20 and IMF

The G20 meeting of this last weekend evolved in the shadow of the confrontation between the US Secretary of Treasury, Jack Lew and the German Federal minister of Finance Wolfgang Schäuble. Obviously the subject of this antithesis was the reluctance of Eurozone to apply the American recipe for economic growth. That is the issue of […]

IMF: European banks do not perform their duty to real economy

During this week everybody took an interest on Europe’s and more so on Eurozone’s financial standing. During the last two days Jörg Asmussen, Member of the Executive Board of the ECB, the International Monetary Fund and the European Council Presidency came out to either criticise or reassure everybody that the European financial and banking system […]

EU Parliament: ECB accountable for not supporting real economy

The European Parliament yesterday held the European Central Bank accountable for the lack of dissemination to the real economy of the cheap liquidity the central bank has accorded to commercial banks. The resolution adopted during the Parliament’s annual evaluation of the ECB’s activities, addresses both the ECB’s monetary policy responses to the Eurozone crisis and […]

Eurozone dignitaries play with people’s life savings

The informal Eurogroup and Ecofin meetings in Dublin today and tomorrow will discuss but are not expected to come up with decisions on two burning and closely interrelated financial issues. It is about the relaxation of bank secrecy legislation in certain EU member states like Austria and Luxembourg and the procedures to be followed from […]

Eurozone bank rescues ‘a la carte’ until 2015 then only bail-ins

The fact that the Eurozone does not have a standard procedure to deal with failing or about to fail banks and the national bankruptcy laws of the 17 member states are far from offering a relevant solution, has prompted the two most competent persons in the Union to describe the way such dealings will be […]

Draghi reveals how failing banks will be dealt, may cut interest rates soon

The governor of the European Central Bank, Mario Draghi, speaking yesterday in his regular monthly Press conference after the Governing Council meeting, was rather straight forward on two crucial fronts. First, he left to be clearly understood that if the now prevailing unfavourable economic conditions in the Eurozone continue, with recession dragging on and the […]

EU Directive makes haircut on uncovered deposits a standard in bank bail-ins

What happened in Cyprus was neither improvised nor exceptional. Peoples’ bank deposits above the secured benchmark of €100.000 were confiscated according to a very important proposal for a Directive which was forwarded from the Commission to the European Council and the European Parliament last June under the name of “Proposal for a DIRECTIVE OF THE […]

Eurozone governed by an obscure body and gray procedures

The Eurogroup, the crucial European decision-making body, regrouping the 17 EU ministers of Finance of the countries using the euro, which has led the south of Europe to the worst economic recession after WWII and introduced the haircut on bank deposits, the until this week most secure financial asset, is an informal forum, who’s decisions […]

Germany hides its own banks’ problems

The insistence of the Brussels, Berlin and Paris authorities that Cyprus is a special case and the rest of the Eurozone banking system is safe, has only superficial value. Markets do not believe that. It’s not only that the Greek, Italian or even the Spanish banking systems are in deep trouble. The problems are not […]