Banks? What banks?

With Europe’s leaders scheduled to meet on 11 March, all talk will be on rescuing troubled economies and Franco-German driven competitiveness pact to ward off future crises. But politicians are keeping quiet about the true nature of the eurozone crisis: the fragility of the banks.

Published on 7 March 2011 at 15:22

This should be the month decisions get made. Europe’s politicians are getting ready for no less than three summits in March, starting next Friday in Brussels. Angela Merkel, Nicolas Sarkozy and the other heads of state and governments of the 17 eurozone states want to get the crisis behind them. The talk will be on the expansion of the rescue fund for euro members in difficulties and the rules the states must adopt to keep budgets in line. And of course, Merkel’s pet theme, the “Competitiveness Pact”.

There’s one issue, though, that Europe’s leaders aren’t talking about, and that’s the fragile situation of the banks. The impression the politicians are giving is that the crisis has for a long time been just about the states, and overwhelmingly those at the periphery of the eurozone – Greece, Portugal, Ireland and so on. But that’s being somewhat economical with the truth. The crisis is also swirling around the banks, German banks too.

Crisis comes round to where it started: the banks

***Read the full article on the Frankfurter Allgemeine Sonntagszeitung site***

From Poland

Left and Right revolt against Merkel-Sarkozy pact

“European revolt against Germany,” leads Dziennik Gazeta Prawna, reporting on the controversy generated by the Franco-German inspired Competitiveness Pact among both European conservatives and socialists. “Five days ahead of a key meeting of eurozone leaders, the Merkel-Sarkozy duo has a problem securing sufficient support for it,” notes the Warsaw daily. Both the centre-right European People’s Party (EPP), whose leaders gathered in Helsinki on 4 March, and the Party of European Socialists (whose leaders met at the same time in Athens) have serious objections. The former issued a press release stating that it would not allow a “Germanisation” of member states economies, the latter threatened to raise a blockade of Brussels during the 11 March summit. Instead of the austerity measures called for by the competitiveness pact, Greek prime minister Georgios Papandreu, speaking on behalf of nine left-leaning EU leaders, proposed the introduction of a 0.05 percent tax on financial transactions and boosting public spending by 10.9 percent over the next five years, which would create up to 8 million jobs. In the face of such fierce opposition, “the dilution of at least some of the pact’s provisions seems inevitable,” concludes Dziennik Gazeta Prawna.

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