Greece asked for a one-month extension of its expiring rescue deal, but the request was swiftly rejected by the rest of the eurozone, three European officials said Saturday.
Greek Finance Minister Yanis Varoufakis made the request at a meeting with his eurozone counterparts here, a day after the government in Athens said it would hold a referendum on its bailout in which it would campaign against the policy overhauls and budget cuts demanded by its creditors.
There was “no support for that,” said one official. Two other officials confirmed that the request had been for a one-month extension and that it was rejected.
The finance ministers of the other 18 eurozone countries will meet without Greece later Saturday evening, two European officials said.
Many ministers expressed surprise and disappointment toward Greek Prime Minister Alexis Tsipras’s decision to call for a popular vote in which he would campaign against the budget cuts and policy overhauls demanded by his country’s creditors.
“It’s a sad decision for Greece because it has closed the door for further talks,” said Jeroen Dijsselbloem, the Dutch finance minister who presides over the talks with his eurozone counterparts. That sentiment was echoed by Wolfgang Schäuble, Germany’s powerful finance minister. “We now have no more basis for further talks,” he said.
Alexander Stubb, Finland’s finance chief, was one of several ministers who said their negotiations would now focus on how to deal with the consequences of a Greek default. “Plan B becomes Plan A,” he told reporters. >> Read More
01 September 2013 - 22:33 pm
Italy will on Monday become the first country to introduce a tax on high-frequency trading in a move that has become a test case for potential further crackdowns on the controversial practice.
The country will introduce levies against high-speed trading and equity derivatives in the final part of a two-stage process established this year to tax equity-related transactions.
However banks and brokers – many of whom were scrambling on Friday for clarification of key details – have warned the new taxes could further damage liquidity in the Italian market. Volumes have fallen sharply since the introduction of a tax on equities in March.
Policymakers in Europe are considering levies on financial transactions as a way to stabilise markets, curb so-called speculative and high-speed trading and plug gaps in government budget deficits. A European Commission proposal has the backing of 11 eurozone countries while France mandated a watered-down tax similar to UK stamp duty a year ago. Similar proposals have also been floated by lawmakers in the US and Australia.
The Italian version explicitly focuses on high-frequency trading and derivatives, which are often used by corporations and banks to hedge against risk. The tax will also apply regardless of where the transaction is executed, or the country of residence of the counterparty.
For high-frequency traders, order changes and cancellations will be taxed at 0.02 per cent when they occur within a timeframe shorter than half a second, once above a threshold. >> Read More
13 August 2013 - 15:07 pm
Germans are feeling much better than expected about their economy, with the just-released ZEW sentiment index giving a reading of 42, up from 36.3 in July.
The Zew Institute’s Current Conditions Index rose even more – to 18.3 from 10.6 in July.
Analysts expected readings of 40 and 12 respectively for the two indices and sentiment is at its highest since March.
The institute comments that the “first signs of an end to the recession in important Eurozone countries may have contributed to the indicator’s rise…. furthermore, the economic optimism is supported by the robust domestic demand in Germany”.
There has also been a strong increase in economic expectations for the Eurozone, the index climbing 11.2 points to 44.
Eurozone industrial production numbers for June are also out. They show an increase of 0.7 per cent, compared to economist expectations of 0.8 per cent and a decline of 0.3 per cent in May.
07 August 2013 - 14:08 pm
“European citizens do not trust the troika, and they are right,” says Viviane Reding, the Vice-President of the European Commission. In an interview with Kathimerini, the Luxembourg politician directs strong-worded criticism at the current decision-making process in the eurozone countries that have been bailed out. “Fundamental decisions, for example on whether to fire tens of thousands of public employees, should not be taken behind closed doors,” she argues. Greece is set to receive the next tranche from the EU-IMF backed bailout mechanism after it agreed to a troika demand to put several thousand public servants into a “mobility scheme” that will eventually result in thousands of dismissals. Reding, who many in Brussels believe is a candidate for a top EU post in 2014, sets a three year timeframe for the phasing out of the troika regime, underlining, nonetheless, the need for Greece to “to stick to the path of reform.”
You recently suggested that the troika structure should be phased out. Why do you think that? After all, it was Europe that asked IMF participation in the adjustment programs…
When the crisis struck Europe, we had to act very quickly. We decided to call in the International Monetary Fund (IMF) because it has the experience and expertise to deal with difficult situations like the one Greece is facing. And we are grateful for the IMF’s contribution to the various stabilization programmes in Europe. But this set-up has now run its course. This is no longer an emergency. By now, the EU has the right tools to cope with its own problems. That is why I say: The time for the troika is over. >> Read More
“End of recession in Europe,” proclaims the Berliner Zeitung. The German daily bases its optimistic pronouncement on the latest purchasing managers’ index, a survey of 3,000 companies in Germany, France, Italy, Spain, Austria, Ireland, Greece and the Netherlands, which is used to forecast economic trends. >> Read More
Eurozone finance ministers agreed to give their €500bn bailout fund the power to pump cash directly into teetering banks on Thursday night, but only after national governments share the burden by first making their own capital investment.
The power to “directly recapitalise” banks through the fund, the European Stability Mechanism, was hailed by leaders as a key achievement to help eurozone countries avoid the fate of Ireland, Spain and Cyprus, where national governments were put at risk of a cut-off from financial markets when they were unable to deal with massive bank bailouts on their own.
“This instrument will help preserve the stability of the euro area and help remove the risk of contagion from the financial sector,” said Jeroen Dijsselbloem, chair of the group of eurozone finance ministers who brokered the agreement in Luxembourg.
Klaus Regling, head of the ESM, said he hoped the powers will be ready to use by the second half of 2014, after the European Central Bank and European Banking Authority conduct a series of asset checks and stress tests to determine whether eurozone banks are returning to health. >> Read More