Yves here. This post looks at the strictures of the Eurozone (debt to GDP and deficit limits) and not surprisingly concludes that the supposedly independent ECB is making matters worse that a more “political,” as in growth oriented one, would. But depicting central bank independence as detrimental is a novel and important argument.
TOKYO — French President Francois Hollande told a group of Japanese business leaders Saturday that the eurozone debt crisis is ‘over’ but acknowledged that steps to boost the region’s growth and competitiveness need to be taken.
“What’s important for you here in Japan is to fully understand that the crisis of the eurozone is over,” Hollande said in the speech at the Imperial Hotel organized by The Nikkei, a major financial newspaper.
BRUSSELS — A teetering Portuguese government has underlined the threat that the eurozone debt crisis, in hibernation for almost a year, may be about to reawaken.
From Greece to Cyprus, Slovenia to Spain and Italy, and now most pressingly Portugal, where the finance and foreign ministers resigned in the space of two days, a host of problems is stirring after 10 months of relative calm imposed by the European Central Bank.
The G20’s stance on deficit reduction helped temp traders back into Spanish and Italian banks, while industrial stocks also made progress, as sentiment toward the global economic rebound starts to improve
In the wake of S&P debt downgrades, Merkel vows faster eurozone reforms.
European leaders promised on Saturday to speed up plans to strengthen spending rules and get a permanent bailout fund up and running as soon as possible, a day after U.S. agency S&P cut the ratings of several euro zone countries' creditworthiness.
US stocks rebounded in rocky trade Thursday amid signs that Italy and Greece were moving to form new governments that would address their deep debt problems.After falling on Wednesday, the Dow Jones Industrial Average was up 113.07 points (0.96 percent) to 11,894.01 in closing trade.The broad-based S&P 500 added 10.59 (0.86 percent) to 1,239.69, while the tech-heavy Nasdaq Composite edged up 3.50 points (0.13 percent) to 2,625.15.Earlier Europe's main markets were mixed as traders watched for more political progress in Athens and Rome.
By Daniel Sckolnik:
"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies." - Groucho Marx
The latest news out of the eurozone is that a bailout of Spanish banks is due to occur shortly. No doubt, Wall Street will celebrate at the thought that the PIIGS (Portugal, Ireland, Italy, Greece and Spain) may all yet survive and the eurozone shall remain intact.
Gold prices raced to another record high level on Tuesday as investors sought shelter from the eurozone debt storm.The precious metal soared to $1,610.10 per ounce at 0720 GMT on the London Bullion Market, continuing its recent record-breaking surge.Gold is seen by investors as a safe-haven in times of global economic turmoil, with financial markets anxiously awaiting Thursday's Brussels summit of eurozone leaders to address Europe's burgeoning debt crisis.