Well, it wouldn’t be Summit Eve without rumours and counter-rumours. But the clown show might have outdone itself this time.
Forty minutes before US markets closed, Reuters reported that the ESM would receive a banking licence and run side-by-side for one year with the EFSF, according to a draft summit statement.
Thursday, December 08, 2011 3:21:32 PM RTRS – EURO ZONE INTENDS TO BRING FORWARD INTRODUCTION OF PERMANENT ESM BAIL-OUT MECHANISM TO JULY 2012 – DRAFT
Thursday, December 08, 2011 3:22:30 PM RTRS – EXISTING EFSF BAIL-OUT FUND TO REMAIN ACTIVE UNTIL MID-2013 – DRAFT
Thursday, December 08, 2011 3:23:12 PM RTRS – PERMANENT EUROPEAN STABILITY MECHANISM TO HAVE MAXIMUM LENDING CAPACITY OF 500 BLN EUROS – DRAFT
Thursday, December 08, 2011 3:25:43 PM RTRS – ESM BAIL-OUT FUND TO BE GIVEN BANKING LICENCE – DRAFT
Thursday, December 08, 2011 3:25:26 PM RTRS – ESM BAIL-OUT FUND TO BE GIVEN THE POSSIBILITY TO DIRECTLY RECAPITALISE BANKS – DRAFT
This was a plan said to be favoured by Herman van Rompuy, which may explain what happened next.
Twenty minutes after the reports hit the wires, a “senior German official” said there was no such plan, which was in line with what the FT and other news organisations, including Reuters, had reported earlier on Thursday:
Thursday, December 08, 2011 3:39:45 PM RTRS – GERMANY REJECTS DRAFT MEASURES INCLUDING BANKING LICENCE FOR ESM, SIMULTANEOUS RUNNING OF EFSF AND ESM, COMMON EURO ZONE DEBT ISSUANCE – SENIOR GERMAN OFFICIAL
For what it’s worth, these were the other reported details of the draft statement:
Thursday, December 08, 2011 3:16:20 PM RTRS – EURO ZONE AIMS FOR NEW RULE TO ENSURE BUDGET DEFICITS DO NOT EXCEED 0.5 PCT OF GDP – DRAFT
Thursday, December 08, 2011 3:17:42 PM RTRS – RULES ON EXCESSIVE DEFICIT PROCEDURE TO BE REINFORCED FOR EURO ZONE MEMBER STATES – DRAFT
Thursday, December 08, 2011 3:18:49 PM RTRS – SANCTIONS WILL BE IMPOSED ON RULE-BREAKERS AUTOMATICALLY UNLESS OPPOSED BY QUALIFIED MAJORITY VOTE – DRAFT
Thursday, December 08, 2011 3:19:39 PM RTRS – POSSIBILITY OF MOVING TOWARDS COMMON EURO ZONE DEBT ISSUANCE IN LONGER TERM SHOULD BE CONSIDERED – DRAFT
Thursday, December 08, 2011 3:24:57 PM RTRS – NEW, NON-UNANIMOUS VOTING RULE TO APPLY FOR EMERGENCY PROCEDURES INVOLVING ESM BAIL-OUT FUND – DRAFT