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Crunch time for euro nations as markets taste blood
AFP - 2 hours 8 minutes ago
BRUSSELS (AFP) - – Eurozone governments stage crunch talks Tuesday on a debt crisis threatening their future cohesion, with the markets having already pounced on Greece, Ireland and Portugal.
The three countries are only the weakest links in a chain of debt coursing through the 16 nations that share the euro currency, and with almost every other member of a European Union bursting at fiscal seams.
Greece negotiated a 110-billion-euro international bailout earlier this year, and has acknowledged it will miss targets set as conditions for the release of fresh eurozone aid.
Ireland admitted Monday it was holding talks about a similar package of emergency aid, under pressure from Germany and the European Central Bank in particular.
And Portugal, which is already unable to borrow money on open markets other than at prohibitive rates, also conceded it was in difficulty Monday.
Ireland's public deficit this year is set to pass 30 percent of GDP, 10 times the permitted EU limit and double last year's Greek deficit.
Its plight is causing consternation among political allies who would have to guarantee rescue loans.
The government in Dublin is in deep trouble mainly because of the costs of a huge crisis in its banking system, in turn the result of banks' massive over-exposure to busted property markets.
While drawing up massive new spending cuts to be announced within weeks, Ireland is still trying desperately to resist the onslaught from euro doubters. It has denied it wants to follow Greece in applying for emergency loans, despite "international" contacts. Focus: Irish troubles a concern for euro stability: EU
"Ireland is making no application for the funding of the state because clearly we are pre-funded right up to the middle of next year," Prime Minister Brian Cowan told RTE state radio.
Still, in a significant development, Northern Ireland's Sinn Fein leader Gerry Adams announced at the weekend he was resigning from British politics. He said he wanted to seek office in the Irish parliament and campaign for a different policy response to the crisis.
Jean-Claude Juncker, head of the Eurogroup of finance ministers who will assemble in Brussels from 1600 GMT, said that without an Irish application the eurozone could not deal with a "theoretical request" for support.
Experts say Dublin will need around 70 billion euros, and Juncker said Europe was ready to act "as soon as possible" if asked.
That was a message firmly underlined by the ECB and the EU's executive commission ahead of the monthly talks, which will open out on Wednesday into debate among all 27 EU nations. Focus: EU 'ready to help Ireland' but funds not needed
Others are already feeling the heat -- and fear that markets will soon train their sights elsewhere, with one of Europe's big five economies, Spain, also under pressure.
Portuguese Finance Minister Fernando Teixeira dos Santos has warned bluntly that "contagion" risks spreading like wildfire.
Twenty-four of the EU's 27 states are currently running deficits way above the EU limit.
And while bond yields for the trio and the crucial spreads against German government borrowing rates diverged Monday, all remained high. The speculation was also dragging down the euro, and markets will again be watched closely over the course of the day.
The pattern closely resembles the build-up in the spring to Greece's bailout.
Since then, the European Commission has agreed to use its better credit rating to guarantee up to 60 billion euros of borrowings for those judged to need external assistance.
Eurozone states have also decided to chip in another 440 billion euros of guarantees, backed by a further 250 billion from the International Monetary Fund.
Not all of them however have so far completed all the steps necessary to ensure their participation.
AFP - 2 hours 8 minutes ago
BRUSSELS (AFP) - – Eurozone governments stage crunch talks Tuesday on a debt crisis threatening their future cohesion, with the markets having already pounced on Greece, Ireland and Portugal.
The three countries are only the weakest links in a chain of debt coursing through the 16 nations that share the euro currency, and with almost every other member of a European Union bursting at fiscal seams.
Greece negotiated a 110-billion-euro international bailout earlier this year, and has acknowledged it will miss targets set as conditions for the release of fresh eurozone aid.
Ireland admitted Monday it was holding talks about a similar package of emergency aid, under pressure from Germany and the European Central Bank in particular.
And Portugal, which is already unable to borrow money on open markets other than at prohibitive rates, also conceded it was in difficulty Monday.
Ireland's public deficit this year is set to pass 30 percent of GDP, 10 times the permitted EU limit and double last year's Greek deficit.
Its plight is causing consternation among political allies who would have to guarantee rescue loans.
The government in Dublin is in deep trouble mainly because of the costs of a huge crisis in its banking system, in turn the result of banks' massive over-exposure to busted property markets.
While drawing up massive new spending cuts to be announced within weeks, Ireland is still trying desperately to resist the onslaught from euro doubters. It has denied it wants to follow Greece in applying for emergency loans, despite "international" contacts. Focus: Irish troubles a concern for euro stability: EU
"Ireland is making no application for the funding of the state because clearly we are pre-funded right up to the middle of next year," Prime Minister Brian Cowan told RTE state radio.
Still, in a significant development, Northern Ireland's Sinn Fein leader Gerry Adams announced at the weekend he was resigning from British politics. He said he wanted to seek office in the Irish parliament and campaign for a different policy response to the crisis.
Jean-Claude Juncker, head of the Eurogroup of finance ministers who will assemble in Brussels from 1600 GMT, said that without an Irish application the eurozone could not deal with a "theoretical request" for support.
Experts say Dublin will need around 70 billion euros, and Juncker said Europe was ready to act "as soon as possible" if asked.
That was a message firmly underlined by the ECB and the EU's executive commission ahead of the monthly talks, which will open out on Wednesday into debate among all 27 EU nations. Focus: EU 'ready to help Ireland' but funds not needed
Others are already feeling the heat -- and fear that markets will soon train their sights elsewhere, with one of Europe's big five economies, Spain, also under pressure.
Portuguese Finance Minister Fernando Teixeira dos Santos has warned bluntly that "contagion" risks spreading like wildfire.
Twenty-four of the EU's 27 states are currently running deficits way above the EU limit.
And while bond yields for the trio and the crucial spreads against German government borrowing rates diverged Monday, all remained high. The speculation was also dragging down the euro, and markets will again be watched closely over the course of the day.
The pattern closely resembles the build-up in the spring to Greece's bailout.
Since then, the European Commission has agreed to use its better credit rating to guarantee up to 60 billion euros of borrowings for those judged to need external assistance.
Eurozone states have also decided to chip in another 440 billion euros of guarantees, backed by a further 250 billion from the International Monetary Fund.
Not all of them however have so far completed all the steps necessary to ensure their participation.
