Category: Euro

Dutch EU Commissioner Neelie Kroes: "No ‘man overboard’ if we lose someone from eurozone."

[UPDATE 2] Dutch finance minister Jan Kees de Jager was asked about Kroes’ comments during the government’s regular parliamentary question time Tuesday. De Jager said that while the contagion risk in the eurozone has decreased over the last year because of measures taken in Brussels, a Greek exit would still be very costly.

[UPDATE] In response to Kroes’ comments, Olivier Bailly, an EU Commission spokesman, today insisted its policy towards keeping Greece in the euro has not changed.

José Manuel Barroso, the European Commission president, may have promoted his economic chief Olli Rehn to vice president last year with new responsibilities for managing the eurozone crisis, but in recent days a growing number of other commissioners seem to be elbowing in, opining on whether Greece will leave the single currency.

On Monday came an interview with Greece’s own commissioner, Maria Damanaki, where she told the newspaper To Vima tis Kyriakis that contingency plans for Greece leaving the euro were being “openly studied”. “Now they’re not simply scenarios,” said Damanaki, whose portfolio is fisheries. “They are alternative plans that are being openly studied.” Rehn’s spokesman insisted that no such plans were afoot within the commission, although he acknowledged some in the private sector were making such calculations.

This morning, however, comes another broadside, this time from Neelie Kroes, the European commissioner from the Netherlands – one of the eurozone’s remaining triple A-rated countries where support for more aid to Greece is dwindling.

Greek government employees protest against austerity measures in Athens on Friday.

As the week comes to an end, we seem no closer to a deal to sort out Greece’s troubles than we were when it started. With rumours of a deal a daily (hourly?) occurrence, and questions over whether eurozone finance ministers will meet Monday to sign off on a new €130bn bail-out, Brussels Blog thought we’d revive our popular “viewer’s guide to the Greek crisis” to lay out the state of play for those not following the negotiations on an hourly basis.

The best way to think of what is currently happening in Greece is to look at it as the proverbial row of dominoes that must fall before a deal is complete. Unless they all fall in order, Athens is at risk of missing payment on a €14.5bn bond due March 20, which could lead to a messy default and renewed chaos across the eurozone.

The first domino has basically been complete since last weekend: a deal with private holders of Greek bonds to wipe off €100bn from Athens’ €350bn debt load.

As we reported on Monday, a consortium of private Greek debt holders has agreed to accept new bonds that are be worth half the face value of their current bonds (including a one-time cash payment). The new bonds would have low interest rates that would reduce their value even more. According to our sources, the “haircut” in the long-term value will be just over 70 per cent.

But there are two more dominoes that must still fall: Greece must (yet again) agree to new austerity measures being urged by the “troika” of international lenders –European Commission, European Central Bank and International Monetary Fund – and then Brussels must decide on how to fund any shortfall.

eurocoasterWelcome back to our live coverage of the eurozone crisis. By Tom Burgis and Esther Bintliff on the  newsdesk in London, with contributions from FT correspondents around the world.

All times are GMT. This post should update automatically ever few minutes, but it may take longer on mobile devices.

Europe’s leaders gather in Brussels today for another crunch summit. This time, we’re told, it’s different. Expectations are running high for a new grand bargain to restore sanity to the eurozone’s finances and chart a course out of the debt crisis. We’ll bring you all the build-up, plus:

  • The European Cental Bank’s interest rates decision and press conference from Mario Draghi, the ECB president under pressure to deploy more of the central bank’s resources to shore up the euro
  • The meeting of centre-right European leaders in Marseille, including Germany’s Angela Merkel and Nicolas Sarkozy of France, the two key players in the euro drama
  • The unveiling by the European banking authority of the individual capital needs of Europe’s banks

Nicolas Sarkozy and Angela Merkel prior to their meeting at the Elysee Palace on Monday. Photo: Remy de la Mauvinere/AP 

Nicolas Sarkozy and Angela Merkel before their meeting at the Elysee palace on Monday. Photo: Remy de la Mauvinere/AP

Welcome back to our live coverage of the eurozone crisis. By Esther Bintliff on the world news desk in London, with contributions from FT correspondents around the world.

This post should update automatically every few minutes, but it may take longer on mobile devices. All times are GMT.

16.15: One of the areas where Angela Merkel appears to have backed down is around the role of the European Court of Justice, reports Joshua Chaffin, our correspondent in Brussels:

Ms Merkel had wanted the ECJ – the European Union’s highest court – to become the ultimate enforcer of new budget rules for the eurozone countries.

A tram passes the euro sign sculpture in front of the European Central Bank ( ECB) in Frankfurt, Germany. Photographer: Hannelore Foerster/Bloomberg

Welcome to our continuing coverage of the eurozone crisis. All times are London time. By Tom Burgis and John Aglionby on the news desk in London, with contributions from FT correspondents around the world. This post should update automatically ever few minutes, but it may take longer on mobile devices.

The turmoil in the eurozone has taken a troubling turn in recent days, with anxiety spreading from Europe’s periphery to its “core” countries. Even as Italy’s Mario Monti readies his economic agenda to be presented today, investors are looking at France, the Netherlands and Austria with increasing unease and wondering whether the ECB might yet ride to the rescue. Over in Greece, today is the anniversiary of 1973′s mass student protests – with demonstrators once more planning to take to the streets. And the bond markets are showing ever more strain, with today’s Spanish bond auction likely to test sentiment still further. We’ll bring you all the latest as it happens.

Mario Monti arrives to unveil his new government at the Quirinale Palace in Rome. Photo: Alberto Pizzoli/AFP/Getty Images 

Mario Monti arrives to unveil his new government at the Quirinale Palace in Rome. Photo: Alberto Pizzoli/AFP/Getty Images

 

Welcome back to the FT’s rolling coverage of the eurozone crisis. By Esther Bintliff and John Aglionby on the world news desk, with contributions from correspondents around the world. All times are GMT.

This post will update automatically every few minutes but could take longer on mobile devices.

Europe’s two new technocratic prime ministers should consolidate their respective grips on power today. Lucas Papademos, in Greece, is expected to win a confidence vote in parliament, while Mario Monti, his Italian counterpart, announces his new cabinet. Eyes will not be far from the markets either, following yesterday’s bruising ride.

 

12.52: Here’s the full list of the new Italian cabinet, courtesy of our reporter Giulia Segreti who is at the Quirinale palace in Rome:

 

Mario Monti, Italian prime minister designate – Image Getty

Welcome back to the FT’s live coverage of the eurozone crisis and the global fallout. By John Aglionby and Esther Bintliff in London with contributions from correspondents around the world. All times are GMT.

This post should update every few minutes but might take longer on mobile devices.

Are calm waters finally visible on the horizon of the eurozone? Perhaps – for now. Mario Monti’s first full day as Italian prime minister designate will be marked by a bond auction and his efforts to form a government. A confidence debate starts in Greece on Lucas Papademos’s government. And German chancellor Angela Merkel holds her Christian Democratic Union party annual conference in Leipzig.

Euro drachma

Josh Chaffin’s piece from the FT’s analysis page: Christos Chanos sits in a conference room at his family’s sun umbrella business in Athens and ponders one of the most pressing questions confronting his crisis-hit nation: should Greece leave the euro?

The head of a company founded by his grandfather in the ancient market stalls of the Monastiraki neighbourhood, he has first-hand experience weathering the destabilising effects of a debt crisis that has held Greece in its grip for nearly two years.

He understands the argument that reintroducing the drachma – which Greece swapped for the euro in 2001 – would enable the country to lower its costs and regain competitiveness. But, like many others, he is reluctant to go down that road. “If you ask me if we never should have entered, I could have a long discussion,” says Mr Chanos. “But at this point, I think it would be a huge distraction. What would happen the day after?”

 

A screen in Hong Kong displaying the Hang Seng index’s turbulent day today. Image AP

Welcome back to the FT’s coverage of the eurozone crisis and its global fallout. Curated by John Aglionby, Tom Burgis and Orla Ryan on the news desk in London and with contributions from correspondents around the world. All times are GMT.

This post should update every few minutes, but could take longer on mobile devices.

Market reaction to events in Italy shows that the crisis is now truly global. Markets are looking for more clarity from Rome on timings, particularly of the austerity vote. Meanwhile the saga of finding a new Greek prime minister rumbles on.

 

Silvio Berlusconi – shutting one’s eyes won’t make the problems go away. Image AFP/Getty

Welcome back to the FT’s coverage of the eurozone crisis. Curated by John Aglionby, Tom Burgis and David Crouch on the news desk in London, with contributions from correspondents around the world. All times are GMT.

Greece really is expected to get a new prime minister today – 48 hours later than expected. Italy, well who knows what’s going to happen there as the EU inspectors arrive to comb through the nation’s finances and bond yields surge … And policymakers and financiers are becoming increasingly concerned about the impact of the crisis on global liquidity levels.

The posts will update automatically every few minutes but could take longer on mobile devices.

 

11.31: Dinmore of the FT, his ear to the ground in Rome, says Italy’s out-of-control bond yields are focusing minds.

Brussels blog

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Contact the Brussels blog team: Peter Spiegel, Joshua Chaffin, Alex Barker and Stanley Pignal.

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The Brussels blog authors

Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.

Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC.

Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.

Stanley Pignal is Brussels correspondent for the Financial Times, covering EU justice, home affairs, social developments, telecoms and the Benelux region. He joined the bureau in January 2009, having previously worked for the FT as a corporate reporter in London.

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