'Everything possible' to be done to protect the eurozone

 
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti on 4 July Angela Merkel and Mario Monti discussed the eurozone crisis on Sunday

German Chancellor Angela Merkel and Italian Prime Minister Mario Monti have said they will do "everything possible to protect the eurozone".

The comments came in a joint statement following a telephone conversation on Sunday.

They echo remarks from French President Francois Hollande and European Central Bank (ECB) President Mario Draghi.

It has increased speculation that the ECB could resume its programme of buying up Spanish bonds.

The remarks came the day before a visit from US Treasury Secretary Timothy Geithner.

On Monday, he will be meeting German Finance Minister Wolfgang Schaeuble before flying to Frankfurt to meet Mario Draghi.

Markets rallied on Thursday following Mr Draghi's supportive comments.

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The US Treasury Secretary's whirlwind visits to the people who matter in eurozone monetary policy has raised speculation still further that policy is changing quietly, with German approval. The difficulty is that if it's not, last week's stock market optimism might be suddenly deflated.”

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The BBC's Stephen Evans in Berlin said that Mr Geithner's whirlwind visit combined with the remarks from eurozone leaders had raised speculation still further that a quiet change of policy was underway.

Eurozone leaders agreed in a summit at the end of June that they would allow their rescue fund to intervene on bond markets.

But since then there has been growing doubt as to whether the ECB could buy bonds from troubled economies if the eurozone's richest country, Germany, opposed the policy.

There may be further signs of the support that some eurozone economies need on Monday, when Italy auctions three, five and 10-year bonds.

Monday will also see the release of the first estimate of whether Spain's economy grew or contracted in the three months from April to June.

It is expected to show that Spain's recession continued.

 

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  • rate this
    +3

    Comment number 171.

    You can kick the can down the road as many times as you like.

    With each kick, however, you are creating more debt that will have to be paid.

    We are now in the position where most of Europe is planning to amass their debt and kick it down the road together.

    Sounds like the debts are only going to get bigger till it becomes like the butter mountain.

  • rate this
    -1

    Comment number 170.

    "alan loughlin
    I would not trust Merkel one iota, at the first sign of resistance she backed down recently over the genital mutilation issue, how could she condone such mutilation of an innocent child without their consent"

    I think you are confused: she was not fending FGM, only circumcision for males as a religious practice of Jews and Muslims, not as a condonation of child abuse generally.

  • rate this
    +2

    Comment number 169.

    To see why bonds are the next step you need to look at the way banking has evolved from providing credit to industry to banking itself now regarding itself as an "Industry".

    Interestingly financial circles still consider themselves as a special case independent from what they term "The Real Economy".

    Fascinatingly this doesn't stop them from milking the real economy for all it was worth.

  • rate this
    -1

    Comment number 168.

    @162
    " this Conservative government (yes it is) who are selling them off with no legal mandate."

    Umm most public services were quite rightly sold off during the 1980s/90s - the rest were sold off by Labour (PPI etc), what's left to sell?

  • rate this
    -1

    Comment number 167.

    This may help Spain in the short term but it will cause a devaluation of the euro in the long term but we must not devalue the pound (quantative easing) to keep the relative value otherwise we will have our finantial nose broken in the future!!

  • rate this
    +1

    Comment number 166.

    "John Campbell
    The biggest mistake,any Politician,can make.
    Is to listen to the experts."

    So, when the "experts" say that the laws of physics say that it is impossible to create energy from nothing, they should be ignored as "the people" want unlimited, free energy? When the democratic will of the people meets the laws of physics, or economics, what are politicians meant to do?

  • rate this
    0

    Comment number 165.

    Despite the current economic climate here in the UK, I predict we will recover faster & further than those chained to the Euro.
    We'll do so with less public debt too, so long as public spending continues to be reined in.
    When, not if, the Eurozone breaks up we'll be relieved we never joined.

  • rate this
    +1

    Comment number 164.

    Merkel first cosies up to France until the change in Government, now she is cosying up to Spain - is it because they are in trouble and hope that Germany will bail them out? I dont think the Germans will go for that somehow. When will Europe learn that the Euro is dead in the water and be proud of being a collection of very different nations?

  • rate this
    +2

    Comment number 163.

    Angela Merkel flew into Paris, immigration officer asked,"Nationality?"
    "German"
    "Occupation?"
    "No, I'm only here for a few days."

  • rate this
    +20

    Comment number 162.

    @142 'LJMT'
    ~~
    I strongly disagree with your post. I think the UK is under more threat from USA interests buying up our essential public services under this Conservative government (yes it is) who are selling them off with no legal mandate.

    You won't see Germany or France allowing banditry of their essential public services and then expecting their tax-payers to fund it on top!!!

  • rate this
    +2

    Comment number 161.

    #153
    Why did you omit the word ethics you fool?

    #152
    It's very ungrateful of the Eurozone not to recognise the stress they are causing the markets.Easy to forget all the wonderful things the markets have done to help these countries in the past - isn't it?

  • rate this
    +3

    Comment number 160.

    104. stan howard
    1 HOUR AGO
    I asked for honest answers and get ignorant negatives'
    1/ Why has Merkel never made a State visit to the UK.
    2/ Why did She snub the opening ceremony ?
    answers please.
    ======
    1) She is not a head of state, so she can't make a state visit anywhere. The German president does that stuff.
    2) The same reason I did- a crap, expensive waste of time and money.

  • rate this
    0

    Comment number 159.

    This stupid buying of worthless IOU's cannot continue. The percentages quoted on the returns are pure science fiction and can never be achieved. Eurozone, Euroland, UK, USA and the rest of the world are wasting good money chasing the promise of magic beans.

  • rate this
    +1

    Comment number 158.

    I would not trust Merkel one iota, at the first sign of resistance she backed down recently over the genital mutilation issue, how could she condone such mutilation of an innocent child without their consent, it disgusts me, this is why religion is now becoming so hated, things which are abhorrent suddenly become acceptable because it is for religious reasons, why are we tolerating this?

  • rate this
    -2

    Comment number 157.

    #148 .... So what is your point? Did you actually read the article, it is about saving the Euro? Not sure any of the treaties envisaged economic collapse, but don't panic the EU politicians will save the day! Some how I doubt it and your ridiculous comments make me believe you may be a budding MEP?

  • rate this
    -2

    Comment number 156.

    Finally Europe is facing up to the fact that the rest of the world values their economies and currency a lot less than they do .

    Time to devalue

    We did it before the rest of the world realised .
    The eeurozone has had to wait untill collapse was a real possibility

  • rate this
    -1

    Comment number 155.

    "37.
    Luther_Wesley-Baxter

    The only solution is for a United States of Europe, with President Merkel at its head; with one finance minister; one parliament; and one currency."

    I'm obviously missing out on something Luther because I thought WW2 was fought to prevent that??

  • rate this
    -3

    Comment number 154.

    European institutions lack the political backbone to enforce community laws, without fear or favour. Therefore the Euro is bound to collapse. Further details by searching in Google for 'Windle stops swindle'.

    Cheers.

    The Common Informer

  • rate this
    -1

    Comment number 153.

    http://www.youtube.com/watch?v=07-hA9DW-Po

    Why is it that that so many former employees of an organization with Enronesque secure key posts all over the world, in all the most important organisations?

  • rate this
    +2

    Comment number 152.

    Being a leader is easy in the good times, it's during the bad times you show that your a leader of PEOPLE. I am sick and tired of the Eurozones indecisiveness (Germany), they should realise that markets can't tolerate it and it just increases the problems. Germany needs to realise it is costing them more the longer this goes on.

 

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