Archive for the ‘Europe’ Category
Walter Russell Mead, an expert in U.S. foreign policy, told the Israeli newspaper Haaretz that America may give Israel the green light to attack Iran if the Obama administration is certain the Jewish State can “get the job done”.
Treasury Secretary Timothy Geithner will be heading for Europe in the next few hours to discuss the continuous eurozone crisis, ahead of yet another crucial European Union summit in Brussels on Friday.
Mr. Geithner is scheduled to hold talks with European Central Bank President Mario Draghi, Bundesbank President Jens Weidmann, and German Finance Minister Wolfgang Schauble on Tuesday. On Wednesday, he is due to meet French President Nicolas Sarkozy and French Finance Minister François Baroin in Paris. He will then visit Marseille for talks with Spain’s future prime minister, Mariano Rajoy Brey. Finally, he will hold discussions with Italy’s caretaker Prime Minister Mario Monti on Thursday before heading back home.
President Obama wants Mr. Geithner to remain involved in the discussions aimed at stabilizing the euro area. There are fears that a failure by European leaders to come to a prompt solution may further damage the global economy, including that of the United States.
On Monday, German Chancellor Angela Merkel and President Sarkozy gave a press conference following a meeting in Paris and announced that they had reached a compromise. Mrs. Merkel dropped her demand that private bondholders shared losses when a country’s debt is restructured. This should reassure investors, encourage them to invest in sovereign debt, and reduce the yields eurozone countries have recently had to pay in order to borrow capital. Countries sharing the single currency will also have to insert a balanced-budget amendment into their constitution, which was a precondition for the European Central Bank (ECB) to continue intervening in the sovereign debt market.
Furthermore, German newspaper Die Welt announced on Monday that the Federal Reserve along with the central banks of the 17 countries sharing the euro could make funds available to the International Monetary Fund (IMF) so that it may provide assistance to highly-indebted European states. Last Friday, Mr. Geithner stated that there were no plans to increase the IMF’s resources, as it had sufficient funds to handle the eurozone crisis.
The Treasury secretary also stated last week that he welcomed the decision of the Federal Reserve, the ECB and the central banks of Canada, the UK, Switzerland, and Japan, to make dollars available more cheaply and more easily to lenders. Other currencies will also be made available when required.
This unprecedented move by several central banks should ease the financial pressures currently experienced by European countries.