por admin » Vie Sep 09, 2011 1:36 pm
Alemannia salio a proteger su banca contra el default (posible ) de Grecia.
Euro Crisis Prompts Germany to Insulate Banks as Stark Exposes ECB Divide
Germany pivoted to insulate its banks against the fallout of a possible Greek default as Juergen Stark’s resignation from the European Central Bank exposed the policy divisions aggravating the sovereign debt crisis.
The sense of disarray in the euro area drew fire from Group of Seven finance chiefs meeting in Marseille, France, today with U.S. Treasury Secretary Timothy F. Geithner lobbying his European counterparts to get their act together for the good of the world economy. Canadian Finance Minister Jim Flaherty even suggested Greece may need to quit the euro.
European authorities “need to do whatever they can do to calm these pressures,” Geithner told Bloomberg Television. “They have to demonstrate they have enough political will.”
Concern policy makers are failing to fix the biggest threat to global growth since the collapse of Lehman Brothers Holdings Inc. prompted investors to sell stocks worldwide and push the euro to a six-month low against the dollar. European bank and sovereign credit risk reached all-time highs as 10-year Treasury and German bund yields fell to record lows on demand for a haven.
Dogged by voter unrest and ideological splits, Europe’s leaders have reignited investor unease less than two months since they detailed their latest remedy for a crisis nearing its second anniversary. Finland is demanding collateral from Greece in return for new aid and German lawmakers want veto power. Governments are also dithering over a revamp and management of their regional rescue fund and fallen short of the closer fiscal ties investors say are needed to guarantee the euro’s future.
Policy Split
Evidence of another split at the heart of policy making was highlighted by Stark’s announcement that he will quit the ECB’s Executive Board, eight weeks before the retirement of President Jean-Claude Trichet and five months since Axel Weber stepped down as Bundesbank president.
Stark made the decision after privately protesting the bank’s program of buying stressed government bonds, which was widened last month to include those of Spain and Italy, a euro- area central bank official said.
The bond buying, which has totalled 129 billion euros ($177 billion) since it began in May, was the ECB’s effort to soothe markets as governments sought longer-term fixes. Not without controversy, it opened the Frankfurt-based central bank to criticism even from within its ranks that it blurs the line between monetary and fiscal policy and risks bloating its balance sheet.
No Advocate
“It’s generally known that I’m not a glowing advocate of these purchases,” Stark told Bloomberg News on Aug. 18.
German Finance Minister Wolfgang Schaeuble said his country will nominate a successor to Stark. Schaeuble’s deputy, Joerg Asmussen, will be the candidate, N-TV reported, without saying where it got the information.
Reflecting mounting concern Greece may default, German Chancellor Angela Merkel’s government is preparing plans to shore up its nation’s financial sector. The measures involve aiding lenders and insurers that face a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld, said three coalition officials, who spoke on condition of anonymity because the deliberations are private.
The existence of a “Plan B” comes as German lawmakers intensify their criticism of Greece, threatening to withhold aid unless it meets the terms of its austerity package, after an international mission to Athens suspended its report on the country’s progress.
Short-Term Cost
The European discord is antagonizing G-7 finance ministers and central bankers during two days of talks in Marseille. Geithner said today that leaders must swallow the short-term political cost of ending the turmoil.
“It is completely within the capacity of the stronger members of the euro area to absorb those costs,” he said. “Costs would be much, much greater if they were to sit and do nothing.”
In echoing Geithner’s demand for greater “political will” and identifying the restoration of investor confidence in Europe as the “Number One” topic for the G-7 meeting, Flaherty said Greece may have to leave the single currency if it fails to press ahead with budget cuts.
“It’s necessary for the Greek government to stay the course,” Flaherty told reporters. “The alternative is probably that they leave the euro. I expect the Greek government would want to continue their fiscal consolidation.”
‘Organized Speculation’
Greece’s finance ministry said in a statement it is committed to “full implementation” of its rescue agreement and rejected discussion of a potential default as “organized speculation.” Credit-default swaps on Greek debt today climbed to a record, signaling a more-than 90 percent chance the nation will fail to meet debt commitments.
Europe isn’t the only threat to the world economy just two years after its deepest worldwide slump since World War II. International Monetary Fund Managing Director Christine Lagarde today urged officials to “act now and act boldly to steer their economies through this dangerous new phase.”
President Barack Obama yesterday announced a $447 billion plan to cut the 9.1 percent jobless rate, while Japan is struggling to prevent a stronger yen from undermining exports. Central bankers are signalling easier monetary policy may be coming even with benchmark interest rates at record lows.
“There is a pretty good chance of an actual stall which would lead the global economy to slide backward,” Nobel laureate Paul Krugman said in an interview in Yaroslav, central Russia, yesterday, describing the risk of a recession as “quite high, maybe 50 percent.”