| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : EU Economy Last Updated: Dec 14, 2010 - 5:35 AM

Schäuble hints at softening of Germany's position on eurobonds; German banks' exposure to Ireland is €25bn
By Michael Hennigan, Founder and Editor of Finfacts
Dec 13, 2010 - 5:50 AM

Email this article
 Printer friendly page

Wolfgang Schäuble, German finance minister, has hinted at a softening of Germany's position on eurobonds in return for closer fiscal integration. Meanwhile German banks' exposure to Ireland is 25bn.

Schäuble said in a newspaper interview published yesterday, that the proposal on common bonds could be looked at if there were fundamental changes in the way the Eurozone operates.

The finance minister highlighted the need for a “discussion about how decision-making in Europe can be made more efficient."

“In 10 years we will have a structure that will resemble far more what one describes as political union,” he told Bild am Sonntag newspaper, the Sunday version of Bild, the mass-selling tabloid, which earlier in the year had led a campaign against bailing-out Greece.

Last week Chancellor Merkel rejected a proposal to launch common bonds, saying that they wouldn't provide the appropriate economic incentives.

The proposal for creating a eurobond was put forward last Monday by Jean-Claude Juncker, prime minister of Luxembourg and chairman of the Eurogroup of Eurozone finance ministers and Giulio Tremonti, Italian finance minister, in an article in the Financial Times.

On  Wednesday, Juncker accused Germany of being “un-European” and “a bit simple” in declaring some areas “taboo” in EU negotiations.

Schäuble in his Sunday interview also presented a more positive tone towards smaller countries in the Eurozone, saying if any country was to quit, the euro, “the consequences would be unpredictable. And looking at the effects of the Lehman bankruptcy, I say: let’s not make the same mistake twice,” he told Bild am Sonntag.

“Those who bet their money against the euro will have no success,” Schäuble said. “The euro won’t fail.”

The finance minister also rejected calls for a return to the Deutsche mark. “Anyone who looks at the development of the German economy knows that our international integration is greater than any other economy,” Schäuble said. “Without the euro our own currency would experience a rise in value with negative consequences for exports.”

The Financial Times reports today that European officials are considering measures to overhaul the Eurozone’s €440bn rescue fund, including using it to buy bonds of distressed governments, according to people involved in the deliberations.

The Economist says in its current issue: "A 20% loss on Eurozone and British banks’ combined exposure to Greece, Ireland, Portugal and Spain would mean a hit of about €300bn.

That is a fraction, albeit a hefty one, of the €1.1trn aggregate Tier 1 capital of the 91 European banks that were stress-tested earlier this year. Some think the BIS (Bank for International Settlements)  data overstate the danger. For instance, German regulators reportedly believe their banks’ exposure to Ireland is only €25bn-30bn, against a BIS number of €150bn. This echoes the complaints of Austrian bankers in 2008, who said the BIS figures on their exposure to eastern Europe exaggerated the true risk and panicked the markets unnecessarily."

Leaders of Germany and France met to plot strategy before a key EU summit. Richard Cookson, CIO for Citigroup Private Banking, joined CNBC for more on the European crisis:

A Deutsche Bank report says that banks’ exposure to the current Eurozone hotspots seems to be limited if measured against total bank assets. This does not rule out contagion risk due to relatively large exposures of individual banks or non-bank financial institutions. It says after all, market perceptions of debt sustainability remain an important factor that may affect banking sector stability.

The DBR report says Bundesbank estimates that instead of the reported $139bn, German banks have only  €25bn actual exposure to Irish borrowers overall.

Deutsche Bank Research: Monitoring cross-border exposure: A primer on how to exploit the BIS banking statistics

Related Articles
Related Articles

© Copyright 2010 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015