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Euro Zone Crisis: Looking For Mr. Euro?

Euro Zone Crisis: Looking For Mr. Euro?

Of course it was a holiday here in the US and financial markets were quieter than usual with Wall Street closed. Thursday the European Central Bank is meeting so they’ll be much to report — still, Wednesday saw plenty of activity.

Talk floated around (reported in French newspaper Le Figaro) that Germany is wanting to create a finance minister with their own fiscal powers (to raise taxes and control spending) for the euro zone (“Mr. Euro,” some have been calling such an official). But German Chancellor Angela Merkel’s spokesman has denied this.

The euro itself fell to a new daily low against the dollar, to $1.252.

Merkel and Monti Meet in Rome

For the first time since last week’s European Union summit meeting at which Italian Prime Minister Mario Monti won significant concessions from Merkel, the two met for talks in Rome in which the focus seemed to be “sticking together, despite it all.” Merkel praised the economic reforms Monti has introduced and said that Germany and Italy would face the euro zone problems “together.” Monti spoke of the need for individual countries needing to do their “homework” while emphasizing that “solutions at the European level” are necessary. (The Guardian posts a “spot the bailout” moment.)

Lagarde, Her Moods and Greece

Officials from the “troika,” the International Monetary Fund (IMF), the European Central Bank and the European commission started talks in Athens with officials in the new Greek government. IMF director Christine Lagarde has indicated that she is “not in the mood” to renegotiate the terms of Greece’s bailout agreement. As she said to CNBC: “I’m not in a negotiations or renegotiations mood at all. We are in a fact-finding mood. I’m sure they will have excellent numbers to show in various directions.”

Actually, the word is that the Greek government is behind in implementing the measures agreed upon in March (no word yet about how that might be affecting Lagarde’s mood).

In France, Austerity Socialist-Style

As part of President François Hollande’s plan to lower France’s deficit to 4.5 percent (from 5.2 percent in 2011), the French government announced 7.2 billion euros in new taxes, a “tax-based retrenchment.” Almost half of the revenue will come from taxes on large companies (1.1 billion euros on large banks and energy firms) and on those with incomes over 1.3 million euros (generating about 2.3 million euros).

It is a strategy to that can be described as “austerity with a strongly socialist flavour,” says Nicholas Spiro of Spiro Sovereign Strategy. The challenge for Hollande will be to put so much of the burden on large companies and the rich, especially as France’s public sector accounts for 56 percent of its gross domestic product.

Barcelona Bourse Protest; Bankia Fraud Case

In Spain, retirees protested at the Barcelona Stock Exchange, saying that the Spanish banking sector had tricked them into making risky investments, as Barbaby Phillips of Al-Jazeera tweeted. No wonder that public anger against the financial sector is growing in Spain: A fraud case has been opened against former executives at Bankia, which required a bailout in May.

Cyprus and Ireland: Of Bailouts and Joblessness

Representatives of the troika also visited Cyprus to discuss plans for a bailout. While it was originally thought that Cyprus would need a 10 billion euro bailout, there are now reports that it may need just that to repair its banks.

Unemployment is up in Ireland to 14.9 percent, way above the 11.1 percent average in the euro zone.

If you’ve read this far, you will not be surprised to hear that many analysts think the euro zone’s problems have simply become too great to solve. Nonetheless, in a report released on Tuesday, Standard’s & Poor’s said there could be some “relief” from the economic crisis in sight after the agreements reached on June 29th at the euro zone summit. We shall see.

Related Care2 Coverage

Euro Zone Crisis: Unemployment At Record High

Euro Zone Crisis: Italy Wins, Germany’s Out

Euro Zone Crisis: No More Merkozy At Day 1 of Summit


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12:54AM PDT on Jul 10, 2012

Thank you for posting.

11:57AM PDT on Jul 7, 2012

The Germans and the Scandinavians have been more careful. Also, England is taking the lead in actually holding the big banks to account for irresponsible speculation. The U.S. has yet to do so.

3:39PM PDT on Jul 5, 2012

Under these circumstances, could someone explain why 1 Euro is still worth $1.25 U.S.?

2:36PM PDT on Jul 5, 2012


10:37AM PDT on Jul 5, 2012

questa moneta ha distrutto l'economia e la vita di molti paesi, solo danni e nessun beneficio.

10:06AM PDT on Jul 5, 2012

“Obama/dems/libs…the same destructive path”, anyone who understands the situation knows that is otter nonsense and anyone who understands President Obama's first term accomplishments in spite of the Republican obstructionism and lies knows that he will go down in history as one of our better Presidents. I am 69 years old, an ex-republican and the worst Presidents I have seen in my lifetime are Nixon, Ronald Reagan, GH Bush, GWB, just take a good hard look because all of these fools are Republicans; the worse of the 4, Ronald Reagan and GWB. Ronald Reagan started us down the road of trickle-down economics and depriving those among us in need without; and it gets worst with each Republican we are stupid enough to elect. Now the Republicans have taken on the ideologies of the far right and the far religious right; they ARE now the Republican Fascist Party. GWB is a drunk, a liar, a man who has committed crimes against humanity, disgraced America and it’s people, drove our economy to just about economic ruin, fool and an egoist, HE will go down in history as our worst President with Reagan and other Republicans to follow, the least offensive was the fool’s father GHB.

Unless each country is willing to abdicate to a UNITED STATES OF EUROPE I really don’t see how the European Union can survive; unless perhaps they just get rid of the countries that are sucking them dry without doing their part.

9:23AM PDT on Jul 5, 2012

thanks for the info

7:46AM PDT on Jul 5, 2012

All our lifetime we hear that we should be putting money aside for retirement. Then the big day arrives and with the pension our income takes a drastic dive, needing to be supplemented on occasion from savings accumulated through depriving ourselves of certain enjoyments during our working life. If we get sick we need to dip in again and if, heaven forbid, we need to go into sheltered housing or a rest home, the fees are so astronomical that there's hardly anything left to us for 'pocket money' and buying a few small pleasures to brighten the days. It seems like whatever we manage to save gets taken away from us by various means anyway, so why bother?
This concerns more countries than just those in the Euro zone.

7:29AM PDT on Jul 5, 2012

Merkel has achieved the dream of both Kaiser Wilhelm and Hitler: a German dominated Europe.

7:27AM PDT on Jul 5, 2012

Merkel has achieved the dream of both Kaiser Wilhelm and Hitler: a German dominated Europe.

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