Daily Archives: December 1, 2011

Gideon Rachman

The political and economic debate in Washington is normally reliably inward-looking – particularly during an election year. But, after a couple of days here, I’ve been struck by the intense interest in (and anxiety about) the European debt crisis. Yesterday, the New York Times and the Washington Post ran very similar lead editorials, imploring Germany to act.

By the end of the day, action had indeed been taken. But it was led by the Federal Reserve in the US, in co-ordination with the central banks of the euro-zone, Britain, Japan, Switzerland and Canada. Even China joined the party, by announcing the first cut in its reserve rates for almost three years. 

Sarkozy after delivering a speech on the eurozone crisis in Toulon. Photo: Jean-Paul Pelissier/Reuters

Photo: Jean-Paul Pelissier/Reuters

Welcome back to the FT’s live coverage of the eurozone debt crisis and its global fallout. By John Aglionby, Tom Burgis and Esther Bintliff on the news desk in London with contributions from correspondents around the world.

Pressure is once again mounting on eurozone leaders to find a convincing solution to the sovereign debt crisis. Today:

Mario Draghi, the head of the European Central Bank made a key speech to the European Parliament, hinting at greater ECB action if governments moved towards a “fiscal compact”

  • France and Spain held bond auctions
  • French president Nicolas Sarkozy addressed the nation on his plan to resolve the crisis – he sided with Angela Merkel in calling for treaty change, said he was convinced the ECB would act “when faced with the risk of deflation that threatens Europe”, and called for greater fiscal integration
  • The Bank of England issued its six-monthly financial stability report. Sir Mervyn King, governor, said the eurozone debt crisis is triggering a spiral that is characteristic of nothing short of a crisis to the entire financial system
  • The world’s biggest economies reported key manufacturing data
  • Christine Lagarde said the G20 would commit the necessary resources for the IMF to play its “systemic role” if circumstances required (see our 19.44 update)
  • Brazil’s finance minister Guido Mantega said Brazil was willing to contribute funds to the IMF to help alleviate the eurozone crisis, noting: “This time, the IMF did not come here bringing money as in the past… This time it came to ask Brazil to lend it money and I prefer to be a creditor than a debtor.”

22.32: Tony Barber, the FT’s Europe editor in London, has been analysing the landmark speech by French president Nicolas Sarkozy and offers these insights: