Category: Financial crisis

Downgrade nation

December 15, 2011 3:13 pm by Gideon Rachman

A fairly extraordinary attack by Christian Noyer, the head of the Bank of France, on the credit-rating agencies and on Britain’s AAA rating seems to confirm what Le Monde was saying last night – a French downgrade is on its way.

It’s all pretty grim, even if you are sitting smugly on the other side of the channel. So it is nice to find something to laugh at. This comment from Tom K beneath the FT’s story on Noyer’s comments, made me laugh: ‘your mother is a ‘amster and your father smells of elderberries’ :-)) I fart in your general direction
life imitates art…

Normally I disapprove of quoting Monty Python. But I think it’s fair enough in this case.

Continue reading: “Downgrade nation”

Posted in Europe, Financial crisis, Foreign affairs, France | Permalink

Eurozone crisis: live blog

December 9, 2011 10:26 am by Tom Burgis

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis and Kimiko de Freytas-Tamura on the newsdesk in London, with contributions from FT correspondents around the world. All times are GMT.

A summit in Brussels ended in deep division, with the UK refusing to back a new treaty for all 27 EU members and leaving the eurozone countries plus at least six others to forge ahead with a pact of their own to enshrine strict new rules on deficits and debt. It was meant to be the summit that would decisively chart a course out of the eurozone’s debt crisis.

19.03 That’s the end of our live coverage today. We’ll leave you with a quick summary of the day’s developments. See FT.com for more news and analysis through the evening.

The European Union’s 27 leaders, minus David Cameron, struck a deal in the early hours to draw up a treaty by March that would bind them to strict new rules on debt and deficits, with automatic sanctions for countries that break them
The UK courted isolation as it refused to sign up to a treaty for all 27 members after David Cameron’s early-hours pitch for safeguards to protect UK financial services met a chilly reception from his counterparts
Markets were volatile before a tentative rally lifted equities in Europe and the US. The euro strengthened against the dollar but yields on Italian and Spanish bonds climbed once again
The IMF welcomed the European deal, which included €200bn for the fund to ensure it has enough cash to deal with any more fallout from the eurozone crisis, with Christine Lagarde, its head, saying she was “hopeful that others will also do their part”

Continue reading: “Eurozone crisis: live blog”

Tags: austerity, bailout, EFSF, Europe, European Commission, Eurozone, Eurozone crisis, France, Germany, Merkel, Sarkozy
Posted in Europe, Financial crisis, Foreign affairs, France, Germany, Global economy, World affairs | Permalink

Britain in the firing line in Brussels

December 8, 2011 7:17 pm by Gideon Rachman

The British delegation that set off for the European Union summit in Brussels today was in no doubt that it faced a rough ride. The British are being accused of worsening the crisis, by adopting a hardline negotiating position. This is regarded as a little unfair in London. As a senior member of the British delegation puts it – “You can blame Britain for lots of things. But we didn’t invent the euro.”

Continue reading: “Britain in the firing line in Brussels”

Posted in Britain, Europe, Financial crisis | Permalink

Eurozone crisis: live blog

December 7, 2011 10:17 am by Tom Burgis

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis on the newsdesk in London, with contributions from FT correspondents around the world. All times are GMT.

18.25 That’s the end of our live coverage of the eurozone crisis today. We’ll be back tomorrow morning for a day that includes the ECB rates decision and Mario Draghi’s press conference, as well as the meeting of centre-right European leaders in Marseille ahead of the start of the EU summit in Brussels in the evening. And, just as the leaders tuck in their napkins for a working dinner, the European banking authority will unveil the details of which banks need to raise what capital.

We’ll leave you with a round-up of today’s developments.

Continue reading: “Eurozone crisis: live blog”

Tags: austerity, bailout, EFSF, EU, Europe, Eurozone, Eurozone crisis
Posted in Europe, Financial crisis, Foreign affairs, Global economy, World affairs | Permalink

Rolling blog: Eurozone crisis

December 5, 2011 10:52 am by FT

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.

19.40: So, after a relatively quiet morning, this afternoon and evening have proved to be a bit of a rollercoaster.

First, Nicolas Sarkozy and Angela Merkel surprised everyone by announcing they had reached “comprehensive agreement” on a new set of fiscal rules ahead of the EU summit later this week. Of course we knew they were going to meet, but to be honest, we hadn’t expected them to say very much in public at this stage. So stock markets rallied, bond yields fell and suddenly it looked like a resolution to the eurozone crisis might be in sight…

Then, just when you thought it might be safe etc etc, this story broke. In brief: Standard and Poor’s has warned Germany and the five other triple A members of the eurozone that they risk having their top-notch ratings downgraded as a result of deepening economic and political turmoil in the single currency bloc. The US ratings agency is poised to announce later on Monday that it is putting Germany, France, the Netherlands, Austria, Finland, and Luxembourg on “creditwatch negative”, meaning there is a one-in-two chance of a downgrade within 90 days.

Understandably, investors took fright, and stock markets pared many of the gains made earlier in the day. There will be more news on this story tonight – see FT.com for all the latest. In the meantime thanks for reading, and for all the comments.

Continue reading: “Rolling blog: Eurozone crisis”

Tags: budget, Europe, Eurozone, Eurozone crisis, Italy, Merkel, Merkozy, Monti, Sarkozy, Van Rompuy
Posted in Europe, Financial crisis | Permalink

Europe’s deal – and why it may not be enough

December 2, 2011 9:15 pm by Gideon Rachman

Stock markets are soaring, apparently in anticipation that Europe may finally strike a deal that “saves the euro”. But here in Washington, they don’t seem so convinced.

President Obama met the leaders of the European Commission and the European Council earlier this week (Barroso and Van Rompuy, in case you have forgotten.) They outlined to him the measures that they expect the EU to take at the December 9th summit. The Commission have also been briefing the IMF. But neither the Obama administation nor the IMF seem to be exactly jumping for joy at what they are hearing from Brussels.

Continue reading: “Europe’s deal – and why it may not be enough”

Posted in Europe, Financial crisis | Permalink

Eurozone crisis: live blog

December 1, 2011 8:02 am by FT

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:

Continue reading: “Eurozone crisis: live blog”

Tags: bank of england, Draghi, Eurozone crisis, Sarkozy
Posted in Britain, Europe, Financial crisis, Global economy | Permalink

From FT.com November 21, 2011

FT column: The markets are not the monster

By Gideon Rachman

Last year, Angela Merkel promised to show the markets who is boss. “There is a kind of battle over what power the financial markets have and how much room for policymaking the politicians have,” said the German chancellor. It was vital, she added, to assert the “primacy of politics”.

Posted in Europe, Financial crisis | Permalink

Eurozone crisis: live blog

November 17, 2011 9:44 am by Tom Burgis

Welcome to our continuing coverage of the eurozone crisis. All times are GMT. By Tom Burgis, James Crabtree and John Aglionby on the news desk in London, with contributions from FT correspondents around the world.

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 anniversary 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 souring sentiment still further.

Continue reading: “Eurozone crisis: live blog”

Tags: austerity, bailout, EFSF, EU, Europe, European Commission, Eurozone, Eurozone crisis, France, Greece, IMF, Italy, Live blog, Merkel, Sarkozy
Posted in Europe, Financial crisis, Foreign affairs, Global economy, World affairs | Permalink

Eurozone crisis: Live blog

November 16, 2011 8:57 am by FT

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 GMT.

Europe’s two new technocratic prime ministers consolidated their respective grips on power today. Lucas Papademos in Greece won a confidence vote in parliament, while Mario Monti, his Italian counterpart, announced his new cabinet and was sworn in as prime minister.

19.03: We’re going to wrap up the live blog for tonight, but you can read lots more on FT.com. Here’s a quick update on today’s events:

In Greece, prime minister Lucas Papademos won an overwhelming vote of confidence in his new interim government – 255 votes in favour, 38 against
Charles Dallara, managing director of the Institute for International Finance, is about to meet with Mr Papademos (see our 12.15 update). The IIF has been negotiating with Greece on behalf of investors holding Greek sovereign debt
In Italy, Mario Monti unveiled his new technocrat cabinet (see our 12.52 update, and this article) and said he would serve as both prime minister and finance minister. ”We finally have a competent government, not one of dwarves and ballerinas,” declared Antonio di Pietro, former anti-graft magistrate and head of the Italy of Values party.
Italy’s statistics agency spooked the market by announcing that it wouldn’t be releasing preliminary Q3 GDP data
The number of jobless in the UK reached 2.62m, a 15-year high, while the number of young unemployed topped one million for the first time since these records began in 1992
In its November Inflation report the Bank of England revised downwards its growth and inflation forecasts, and prompted economists to predict that quantitative easing would be ramped up sooner than expected
Mervyn King, the Bank of England governor, said he had “great sympathy” with the ECB in “not going around and buying all sorts of assets”
Angela Merkel said Germany was prepared to “give up a little bit of national sovereignty” in the name of strengthening the wider eurozone area (see 13.44 update)
Portugal passed its latest troika exam - or rather, the European Union and International Monetary Fund approved the disbursal of the next €8bn tranche of the country’s €78bn financial rescue package after concluding a second quarterly review of the the government’s progress with the bail-out programme (16.04 update)
Italy’s 10-year government bond yield spent the day fluctuating around 7 per cent – and finally settling at that level, reports Dave Shellock on our markets team. Reported buying by the European Central Bank of both Italian and Spanish debt offered only limited support