Europe summit last chance

Group of 20 defuse 'currency war'

Source: (agencies)
Date: January 28, 2012
European leaders meet on Monday at a summit is the first to get away with calling a summit last chance for a long time after the relative calm that seen in the debt crisis that has not been with that finding lasting solutions to date. Detente has led the bond market that has prevailed in recent weeks after the European Central Bank pumped a huge amount of capital in the banking sector to restore some calm after two years of constant tension and questions about the future of the euro and its ability to survive.

The proof of this, the next summit of the European Union will allocate the bulk of its work for the means of reviving growth and function in Europe claim to speed up turn the page on the debt crisis of the black page with the austerity budget. He said the Prime Minister of Luxembourg Jean-Claude Juncker, soothing: “There will be numbers, or the decisions of exciting.” But the most important thing is to send a message of optimism to the public, who intimidate the crisis.

And show all of the French Finance Minister and the German, Francois Parwan and Wolfgang Schauble, some optimism. Parwan said that there were signs of some kind of stability in the euro area and that investors now feel the reforms carried out by the large majority of Member States of the European Union. For his part, Schaeuble said: “We are on the right track,” adding, however, that “it is still considered early stage we are over the worst.”

And Icherkhma this cautious European official directly involved in crisis management believes that “it is too early to give up vigilance because the position of the market is not always Mountqah” and that this relative calm is due largely to the technician, a liquidity injections by the ECB, which allowed national banks start of a new purchase of public debt.

He warned: “Since we have seen a period of calm and renewed crisis and strongly with Portugal,” which was forced to seek international assistance. Does not seem so far that this country was able to get out of the crisis. Spain also continues to suffer from a deficit in the budget compared to the expectations raised the concern of the European Union this week. For Greece it is also difficult to get out of the recession.

Still doubts the possibility of reaching an agreement with the banks asked to reduce their loans by one hundred billion euros to avoid default is “disciplined” for countries to pay. A scenario that is no longer unlikely. Hans Martens said: “Even the failure of negotiations on the participation of the private sector and out of Greece is also the possibility of the euro area have become apparent within the scenarios that can be tolerated.”

On the other hand look like things are going well, albeit slowly, on the arsenal to combat the crisis in the euro area. The International Monetary Fund launched a major campaign to convince the euro area to the striking force to raise funds to save countries in crisis to 750 billion euros compared to a maximum of 500 billion so far.

Germany, which still has so far refused any increase in its contribution can, however, to agree soon to make some concessions on this point is expected in return for recognition of a new European Treaty strengthen budget discipline at the request of Berlin.

Despite official denials seem to Chancellor Angela Merkel is prepared to soften its position according to a source familiar with a broad state of negotiations. The European source for last hope in the possibility that the result coincided schedule to sign a treaty with the re-evaluation of the budget ceiling of rescue funds through another summit in March to persuade the Germans to increase the financial means to these funds.