Main focus of Monday, May 10, 2010

EU agrees to reinforce the euro

The EU agreed early Monday morning on a loan guarantee of around 500 billion euros for financially weak members of the Eurozone. Up to 250 billion euros in additional funds will come from the International Monetary Fund. While for some commentators the move will further weaken Europe's economy, others hope it will bolster trust in the euro.

Neue Zürcher Zeitung - Switzerland

With their rescue plan for Greece and the euro the leaders of the Eurozone have spread disease in the Union and weakened its currency, writes the Neue Zürcher Zeitung: "It could well have fatal consequences for the EU Commission to aid countries with largely self-induced problems by issuing bonds that are more or less collectively backed up by the euro states. On the one hand it would allow a sick economy to benefit from the creditworthiness of healthy states. Diseased countries would so to speak be hooked up to the blood circulation of healthier ones - and the fitter states to that of the sick. There's no quicker way to transmit diseases than that. In this way the euro and the EU would become contagious institutions, steadily weakening the development of Europe. In addition the bonds would practically provide the highest EU level with its own money. From there it's just a small step to direct EU taxation." (10/05/2010)

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Dziennik Gazeta Prawna - Poland

The EU's emergency fund for member states in financial difficulties is a test of whether financial markets will react to politics, the conservative daily Dziennik Gazeta Prawna concludes: "Today we will find out whether the financial world trusts European politicians. And whether the creation of a European stability mechanism can dispel doubts about the financial situation of countries like Greece, Portugal and Spain. Or more precisely, whether the foreign exchange market will calm down and the euro will stop decreasing in value - and whether afterwards the global markets will stop to catch their breath. If so, this would finally bring a ray of sunshine into all the worry about the situation in Europe. And perhaps then trust in the Eurozone would begin to be restored." (10/05/2010)

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All available articles from » Marcin Piasecki

Eleftherotypia - Greece

The EU's reaction to the Greek crisis and the protection of the euro come very late, the left-liberal daily Eleftherotypia complains, and calls for a fundamental decision on which direction the EU is to take: "The EU must choose between two approaches: the first is to intensify its efforts towards Europe's unification ... and back it with resources, but not with policies that only worsen the recession and smother countries. That leads to bankruptcy and withdrawal from the Eurozone. The second approach is for each country to continue pursuing its own interests. It leads - as the current crisis has shown - to them moving away from each other and eventually to disintegration. The disintegration of today's Eurozone will lead neither to a return to traditional values nor the formation of a hard core consisting of Germany, France, Luxembourg, Belgium and the Netherlands. Rather it would produce great rivalries and set Europe back many decades." (09/05/2010)

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All available articles from » Dimitris Tsiodras

Blog Estremo Occidente - Italy

The billions of euros being invested into protecting Eurozone countries from speculation are simply a diversionary tactic, Federico Rampini writes in his blog Estremo Occidente for the left-liberal daily La Repubblica: "Hunting speculators has now become the main problem of the governments of the Eurozone. But conjuring up the dark powers of capitalism is a sign of weakness. Those who take up arms against speculators are breaking a thermometer that shows the patient has a high fever. ... The Asian crisis in 1997 should be a lesson to the EU. Instead of shoving the blame on speculators the Asians tidied up their finances. ... Smear campaigns are a convenient means of diverting attention for governments and central banks but they have nothing to do with the economy, only with the pseudo economy." (10/05/2010)

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All available articles from » Federico Rampini

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