Entries in Euro (9)


New Bond-Buying Push Aims to End Euro Crisis

iStockphoto/Thinkstock(FRANKFURT, Germany) -- The president of the European Central Bank, Mario Draghi, announced a new program Thursday to make unlimited purchases of government bonds. The policy is a bold attempt to cut the interest rates of distressed nations, and put an end to speculation of a euro currency breakup.

As the plan was announced, yields of Spanish and Italian debt stayed lower than they were last month. Wall Street gave a thumbs up to the Euro moves -- after the first hour of trading, the Dow Jones index was up more nearly 200 points.

Draghi said the program, called Outright Monetary Transactions, “will enable us to address severe distortions in government bond markets.”  He told journalists the new measures are a “fully effective backstop” against volatility.

The run-up in interest rates, he says, have been caused by “unfounded fears on the part of investors of the reversibility of the euro.”

Speaking in Frankfurt, Germany, Draghi said the size of the bond purchases would be made public every week, while a detailed account by country will be released monthly.

Draghi said European governments needed to continue with deficit reductions and labor market reforms.  Responding to German opposition to central bank bond purchases, he said if a bailed-out country fails to meet its fiscal targets, the bank could stop buying its bonds.

The ECB is forecasting the recession in the eurozone will continue with the economy shrinking by 0.4 percent this year before starting to grow in 2013.

Copyright 2012 ABC News Radio


Political Football: Greece Takes On Germany

Pixland/Thinkstock(GDANSK, Poland) -- Greece will wiggle itself out from under Germany’s boot heel for at least 90 minutes on Friday, as the international spotlight shifts from the Eurozone’s hottest fiscal feud to an unlikely European Championship quarter-final soccer match in Gdansk, Poland.

Victory against the heavily favored German side, with Chancellor Angela Merkel flying in from Berlin to support her squad, would make for a rare and glorious night in Austerity-blighted Athens.

Tabloids newspapers around the world spent the past four days chewing up the storyline.  

“Rejoice, dear Greeks,” wrote Germany’s Bild newspaper, “your bankruptcy on Friday is on us!”

“Bring us Merkel,” read a headline in Greece’s Goal News, “You will never get Greece out of the euro.”

Players from both sides have downplayed the political angle, with Greek striker Georgios Samaras (no relation to new Greek Prime Minister Antonis Samaras) calling the subplot “a bad thing,” and declaring his team was “going to play and enjoy it because we love it, nothing else.”

German manager Joachim Low sounded a similar note on Tuesday.

“Angela Merkel and the national teams are on very good terms,” he told reporters.  ”We have reached an agreement where she doesn’t interfere with my tactical instructions and, in return, I don’t deal with her political agenda.”

If only it were so simple.  While it’s a touch overwrought to say “soccer explains the world,” there should be little doubt that the sport has a way of synthesizing the politics of the moment and calling up the pain of generations’ past.

Copyright 2012 ABC News Radio


New Greek Ruling Party Works Fast to Form Coalition Government

iStockphoto/Thinkstock(ATHENS, Greece) -- With virtually no time to spare, the head of the New Democracy Party that won Greece's election on Sunday has begun trying to forge a coalition that will keep the country's fragile economy from total collapse.

Voters selected Antonis Samaras' party by a very narrow margin over a leftist bloc that wants to leave the eurozone and return to Greece's old currency.  Economists from around the globe maintained that that scenario would have spelled certain disaster for Greece and the rest of the world's economy.

Samaras should be able to get enough allies on his side to moderate terms of the bailout agreement that Greece reached with the European Union and the International Monetary Fund.

Where things go from there is anyone's guess, with some analysts already saying the point of no-return has already passed and the continent could soon be in the throes of a deep recession.

With Spain and Italy in similar straits, German Chancellor Angela Merkel has told Samaras that the new coalition must abide by its obligations and cannot go back on reform pledges previously made by Greece.

Copyright 2012 ABC News Radio


Greek Election Results Could Spur Global Financial Crisis

iStockphoto/Thinkstock(ATHENS, Greece) -- Greek voters may hold the future of global banks and the single currency euro in their hands when they head to the polls on Sunday for the country's Parliamentary election.

One of the two leading parties is opposed to the austerity measures placed on Greece in exchange for its financial bailout. Should the party gain control of the country's government, they could scrap the bailout and withdraw Greece from the euro, setting off a chain reaction that may lead to the failure of a number of banks worldwide.

The world's central banks are said to be standing ready to act in case of a financial crisis.

Copyright 2012 ABC News Radio


Mystery Philanthropist Leaves Envelopes of Cash in German Town

Photodisc/Thinkstock(BRAUNSCHWEIG, Germany) -- A secret philanthropist has been hiding envelopes stuffed with thousands of euros around the tiny German town of Braunschweig.

So far, the donor has left 19 envelopes totaling 190,000 euros -- or $250,256 -- in the village, about 145 miles west of Berlin, since November, according to some reports.  One was found under a doormat and another was slipped behind hymn books in a church.

What is known about the anonymous donor is that the money comes in blank white envelopes, sometimes with directions on how to spend the donation.  The largest gift was $13,218 -- 10,000 Euros -- and the first recipient was a man who had thousands of euros stolen in a burglary.

The most recent beneficiary was Eva Reulette, a hospice worker who found 10,000 eruos under her doormat.

“We couldn’t believe it,” she told DPA news service.  “We had just been talking about how great these donations are.”

Michael Knobel, a manager of a hospice, which specializes in comforting the terminally ill, also got an envelope.

He told the BBC, “This person gives money for good causes, like hospice, kindergarten or churches.”

Another donation went to the family of Tom Neumann, 14, who had become disabled after a swimming accident.  The boy’s mother, Claudia Neumann, was astounded by the generosity.

“I was driving when I heard the news.  I had to park on the side of the road.  I was speechless.  For someone to act so selflessly…was astonishing,” she said.

There is much speculation as to whether the generous gifts are an old person nearing the end of his/her life, or even a few people working together to reward those who are less fortunate without seeking anything in return.

Copyright 2012 ABC News Radio


Germany Proposes Greece Acquire a Budget Commissioner

Hemera/Thinkstock(BERLIN) -- Germany is pushing for Greece to acquire a budget commissioner to help tackle the country’s tax and spending, reports indicate.

BBC News reports that the German proposal would create a budget commissioner who would have veto powers over Greek budgetary measures if they were not aligned with standards set by international lenders.

"Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time," the Financial Times reported saying of Germany’s proposed plan.

Copyright 2012 ABC News Radio


European Debt Crisis: Leaders Meeting Again to Resolve Turmoil

Hemera/Thinkstock(BRUSSELS) -- European leaders are meeting in Brussels again on Friday to negotiate a way out of their debt crisis and restore the credibility of the euro currency -- or so they hope.  If they fail, economists say the shockwaves could derail the U.S. recovery.

This is the fourth recent European get-together that’s billed as a make-or-break “summit to end all summits,” and the “last chance to save the euro.”  Yet, there’s no doubt that the stakes are high.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have spent the last week talking up the importance of the summit.  Sarkozy, who faces an election next year, has said the very existence of the European Union is under threat.

European leaders are expected to discuss ways of limiting structural deficits and increasing the firepower of the eurozone bailout fund.  The European Union is based on several founding treaties, as well as subsequent amendment treaties, that have been agreed to by all member countries.  Germany and France now say they want changes to those treaties to guarantee budgetary discipline.

The problem is that treaties can take years to negotiate and ratify, and the markets have shown that they’re in no mood to wait.  All 27 E.U. member countries have their own domestic concerns that can make compromises difficult.  The E.U.’s Treaty of Lisbon, for instance, took eight years to negotiate.

As European officials already acknowledge, new rules that come into effect several years down the line aren’t going to do the trick.  So there’s talk of a fast-track “fiscal compact” that won’t require treaty changes.  To further complicate things, discussions are underway to see if reforms can be agreed to by the 17 members that use the euro and without the approval of those E.U. members that retain their national currency.

It remains to be seen if Europe’s leaders can agree on a deal that will help those countries with massive debts, and persuade the markets that they can weather the storm.  The rest of the world, including the White House, will be watching closely, and the outcome of this latest summit will shape European politics for many years to come.

Copyright 2011 ABC News Radio


Greek PM: Debt Deal is Only Way to Stay in Euro


(ATHENS, Greece) -- One week after European leaders made an agreement to decrease Greece’s debt and avoid financial meltdown in the Eurozone, Greek Prime Minister George Papandreou warned the Greek parliament that the only way to stay in the euro currency is to agree to last week’s deal.

Greece is reportedly softening its opposition to the plan as Papandreou has called off a referendum for the Greek people to vote on the plan, after first announcing the referendum on Monday.

The White House stressed Thursday that, regardless of what happens in Greece, the Eurozone debt deal must be implemented swiftly. On Friday, Papandreou faces a confidence vote in Greece’s parliament.

European leaders have acted quickly to try to avoid a recession. The European Central Bank decreased its benchmark interest rate to 1.25 percent from 1.5 percent on Thursday.

Greece was to receive an installment of 8 billion euros as a loan this month and has said it will run out of money in mid-December otherwise.

The bailout plan would cut in half the privately held Greek sovereign debt, according to Peter Morici, professor at the Smith School of Business, University of Maryland School.

“However, to receive this concession and other aid from richer EU governments, Greeks must accept draconian austerity measures,” Morici, the former chief economist at the U.S. International Trade Commission, wrote in a note. “These would further drive up unemployment, and shrink Greece’s economy and tax base at an alarming pace, placing in jeopardy eventual repayment of Athens’ remaining debt.”

Morici said the Greeks should accept the bailout and continue in the euro “only if they determine the currency serves them well.”

“As currently constituted, a single currency may serve the One Europe designs of France and Germany, but make Greece and the other Mediterranean states nothing more than the victims of a northern conquest,” he wrote.

World leaders, including President Obama, have urged European leaders during the G-20 summit in Cannes, France, to quickly carry out their agreement and resolve Europe’s financial crisis.

Copyright 2011 ABC News Radio


Greek Prime Minister Calls for Surprise Referendum

Hemera/Thinkstock(ATHENS) -- Greek Prime Minister George Papandreou announced late Monday night, the decision to hold a referendum on the bailout approved for Greece last week. This move puts the extremely unpopular austerity measures to a popular vote, which could threaten the financial futures of both Greece and the euro.

If the popular vote is a no, the deal between Greece and the European Union would dissolve, almost certainly guaranteeing Greece would default on its debt by cutting off international funding. A yes vote would shift the responsibility of budget cuts onto the public, enacting the austerity measure and enabling Greece to receive aid from the IMF and the rest of the Euro zone .

This referendum is expected to take place in January.

Already the news has sent shockwaves through the European markets, as the DAX, CAC and FTSE all opened down.

French President Nicolas Sarkozy is holding an emergency meeting today of top government ministers to discuss Greece's surprise decision.

Copyright 2011 ABC News Radio

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