One of the following is an autumnal haiku composed on Twitter by Herman van Rompuy, President of the European Council. But which is it?
The night has fallen
The bare branches can be seen
Even more lonely Read more
We just had to highlight this excellent cut-out-and-keep guide, from today’s print FT, to the tussle over banking union, fiscal union, and debt mutualisation:
The president of the European Council said Friday that a new intergovernmental treaty meant to save the single currency will include the 17 eurozone states plus six other EU countries – but not all 27 EU members, reports AP, and the bloc’s permanent bail-out fund was capped at €500bn, after talks in Brussels that went well into Friday morning. German Chancellor Angela Merkel praised the plan, saying ”I have always said, the 17 states of the eurogroup have to regain credibility,” she said. “And I believe with today’s decisions this can and will be achieved.” Herman Van Rompuy, president of the European Council, said the countries would provide up to €200bn in extra resources to the IMF. French President Nicolas Sarkozy said early Friday he would have preferred a treaty among all EU members, but that was not possible because the British proposed that they be exempted from certain financial regulations. “What is on offer isn’t in Britain’s interest so I didn’t agree,” said British prime minister David Cameron, according to the BBC on Twitter. Reuters says the EU leaders decided that the currency bloc’s future permanent bailout fund, the ESM, would be capped at €500bn at Germany’s insistence. It will also not get a banking license, which would have allowed it to draw on ECB funds to increase its firepower, another move Germany objected to. However AP also reports Mr Sarkozy also said two bailout funds would be managed by the ECB, though the details still need to be worked out. Read more
The ECB deploy more stimulus tools on Thursday, says Bloomberg. Economists expect another 25 basis point cut in ECB’s benchmark interest rate, and the news agency says the central bank may also loosen collateral criteria to give banks greater access to cheap cash and offer longer-term loans, citing three euro-area officials with knowledge of the deliberations. The reports come as as a crucial eurozone summits set to begin in Brussels, and after Germany on Wednesday insisted that its European partners must undertake the politically fraught process of changing EU treaties, or at least accepting a binding new eurozone accord. The FT says a senior German government official dismissed the suggestion by Herman Van Rompuy, European Council president, that tougher fiscal discipline could be enforced without a full-blown treaty overhaul. “A number of actors have not understood the seriousness of the situation,” the German official said, warning that a “bad compromise” of small steps or “little tricks” would not meet the expectations of the public or the financial markets. The tough German line came as Angela Merkel, the German chancellor, and Nicolas Sarkozy, French president, published a joint letter to Mr Van Rompuy, calling for sweeping measures to enforce fiscal discipline, including near-automatic sanctions for countries with excess debt or deficits. The uncertain fate of the eurozone, together with Congress leaving decisions on fiscal policy for 2012 to the very last minute, means the US Federal Reserve is unlikely to change monetary policy when it meets next Tuesday, says the FT separately. Asian markets fall on doubts about the eurozone, says Bloomberg, compounded by weak economic data. Read more
European leaders on Monday night appeared to narrow their differences over how to prevent European Union members from slipping into economic crisis, with increasing consensus that penalties and fines with significant bite must be imposed on countries that fail to reduce persistently high debt levels, the FT reports. At the same time, officials who participated in the late-night meeting of the EU’s economic governance taskforce said there were still disagreement on how exactly to judge whether a country is in breach of debt guidelines and how automatically the fines should be imposed. Read more
Herman Van Rompuy, president of the European Union, has blamed the strength of the euro in recent years for blinding the eurozone to its underlying fiscal problems. In an interview with the Financial Times, Mr Van Rompuy added that the 16-nation bloc had been on the edge of a breakdown last month that could have caused a world crisis. But European leaders now understood that the way forward was to implement politically unpopular but necessary economic reforms, such as opening up labour markets and raising the retirement age, he said. Read more
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