Euro area battles the debt crisis
Twelve days after a final summit was intended to stem the debt crisis, building a solid line of defense in the euro area has not moved an inch. Concerning the strengthening of the European financial stability, a crucial measure to contain the crisis and save the sinking euro area, the finance ministers of Seventeen, meeting in Brussels, continue to work on assumptions and not on real plans. And are forced to get up to pray that the deep reluctance of China and other emerging countries to replenish the fund.
Asked to bring some of its huge reserves in support of the euro, Beijing has not, to put it mildly, stamped with enthusiasm. Reflected in the terse statements of Jin Liqun, head of sovereign wealth fund China Investment Corporation: “The troubles that have occurred in European countries was solely due to problems accumulated by a corporation limit, living on social benefits. Laws Social obsolete. They lead to laziness, indolence, rather than work hard. We are optimistic vis-à-vis the euro. But there are a number of reforms to be undertaken without delay. have 17 members and 17 governments is not an excuse to do nothing. ”
Clouds
Still divided on several issues, the ministers were content to write a technical paper outlining the options available for enhancing: either a partial insurance mechanism of new bonds issued by euro area, is a device consisting of contributions to attract extra- Europe in a new fund backed by the European Financial Stability Fund (EFSF) and the International Monetary Fund (IMF).
In fact, this simply states that had already been decided by the leaders of Seventeen on October 27. It does not advance. ”The technical work will be completed by late November, so the funds can be maximized using the month of December,” hopes the President of the Eurogroup, Jean-Claude Juncker.
But rather than settle, problems continue to accumulate for the euro area.
“The water is rising”
The EFSF has to borrow to Ireland three billion euros in the markets, a record for this young institution supposed to have the full confidence of investors. ”But it was in a difficult environment in the middle weeks of confusion about Greece,” minimizes his boss, the German Klaus Regling.
Greece has not yet national unity government, as required partners that prevent: unlock the check of eight billion euros for him to avoid bankruptcy at the end of the year will be effective that after receiving a “written commitment” of the country’s main political parties to implement the decisions taken in late October on a second rescue plan
Rest of Italy. ”The water is rising,” admits one close to the negotiations, referring to the refinancing rate of Rome, which set a new record, endangering its ability to manage its debt. In Brussels, the emphasis is on the irrationality of this increase: Italy has primary surpluses, the debt is certainly huge, but largely in Italian hands. Yes but now there is Silvio Berlusconi: “If Berlusconi goes away, replaced by a strong government with a credible plan, that’s fine,” sighs one European diplomat.
Guardianship
Meanwhile, Europe sends its experts to Rome to oversee the implementation of promised reforms to improve public finances. The IMF does the same, “at the request of Italy” which “wants to send a sign to the markets it is serious in its commitments,” said one diplomat.
Conclusion of a close case, “It’s all a battle for the credibility of the euro area. We must convince that we are not amateurs.”
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