| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
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.

Welcome

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

Links

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

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : EU Economy Last Updated: Jan 11, 2012 - 3:51 PM


Merkel has "great respect" for recent Italian economic reforms; Germany may provide more cash for rescue fund
By Finfacts Team
Jan 11, 2012 - 3:48 PM

Email this article
 Printer friendly page

German Chancellor Angela Merkel said Wednesday that she had "great respect" for recent economic reforms passed by Italy's interim government, stressing to Prime Minister Mario Monti in Berlin that Rome would be "rewarded" for them as the crisis-hit country struggles to cut its debt. She also said that the German government was ready to accelerate the introduction of the €500bn European Stability Mechanism - - the permanent Eurozone rescue fund - - and “to perhaps pay in more capital at the start … if the others are ready to do it.”

"I think [the reforms] will strengthen Italy, will improve its economic prospects and we have watched with great respect how quickly they have been implemented," Merkel told journalists at the Chancellery after meeting Monti.

"I think that, overall, the work of the Italian government will be rewarded and I have said from the beginning that we should work very, very closely together," she added.

Monti said he hoped that "the implementation of good policies would translate to sensible rates" as Italy's borrowing costs remained above the critical seven-percent mark seen as unsustainable.

He had complained in man interview with the German daily Die Welt of possible "anti-European" protests in his country if Rome's reform efforts were not recognized adequately.

"The problem is that despite our sacrifices, we have not got anything in return from the European Union, such as a drop in interest rates. Unfortunately, we have to say that our reform policies have not received the recognition and appreciation in Europe that they deserve," he said.

Italians received a boost on Wednesday from data showing the country's public deficit had fallen to its lowest level since the fourth quarter of 2008, according to the Istat data agency.

Rome has pledged to balance its budget by 2013. At present, Italy's total accumulated debt is over €1.9trn, or 120% of GDP.

The talks exceeded the 90 minutes set aside for the meeting, which  Merkel said had been “a very important exchange.”

“It took a little longer not because we quarrelled but because we had a lot to discuss.” She said Rome and Berlin now had “very good co-operation.” 

Draft fiscal treaty

A copy of the draft EU fiscal treaty [pdf] seen by Reuters will only allow Eurozone countries to incur budget deficits during severe economic downturns or other exceptional events.

The latest draft sets out more clearly when the Eurozone would tolerate a deviation from a budget in balance or in surplus, termed  the medium-term objective.

"Temporary deviation from the medium-term objective will only be allowed in cases of an unusual event outside the control of the contracting party with a major impact on the financial position of the general government or in periods of severe economic downturn for the euro area, the EU or the concerned contracting party," the draft document says.

The balanced budget rule, which demands governments balance their budgets over the economic cycle, is central to the new treaty and the draft sets a provisional timeline for the entry into force of the new regime by the start of next year.

Importantly for Ireland, the draft says it's not necessary to incorporate the balanced budget rule in the Constitution: "NOTING that compliance with the obligation to transpose the 'Balanced Budget Rule' into national legal systems through binding and permanent provisions, preferably constitutional, should be subject to the jurisdiction of the Court of Justice of the European Union, in accordance with Article 273 of the Treaty on the Functioning of the European Union."

The draft also removes a controversial reference to deeper integration in the single market among those who sign up to the pact.

Up to 26 EU countries are expected to back the agreement.

Spain to borrow less this year

Spain's economy ministry said today that it plans to borrow €86bn on financial markets in 2012, down from 2011.

This gross figure is almost €10bn less than the €95.6bn raised by issuing sovereign debt in 2011, said the Treasury. T

Spain's first debt issue of 2012 takes place on Thursday, when the government hopes to raise between €4bn and €5bn in three- and four-year bills.

Banks' ECB cash sets another record

Figures from the ECB today show that Eurozone banks deposited a record sum with the European Central Bank, suggesting reluctance to lend.

Banks put €485.9bn with the ECB on deposit for 24 hours, beating the record set the previous day.

Lenders gain an interest rate of 0.25% for their cash deposited at the ECB, less than they would receive on the interbank market.

Check out our new subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

It's a simple fact that in the prevailing economic climate, the provision of high quality content cannot be sustained through advertising alone. 

Business executives who put a premium on time and value high quality information, should use our service.

Related Articles
403 Forbidden

Forbidden

Execute access is denied.


© Copyright 2011 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Investor sentiment in Germany rose sharply in December
Eurozone business activity grew at a slightly faster rate in December
ECB hopes SME firms will gain from Thursday's refinancing operations
Ifo Institute says German economy to gain impetus in 2015
German per capita standard of living highest in Europe; Ireland below EU average
Youth unemployment problem in Eurozone pre-dated crisis
German imports fell sharply in October; Exports at monthly record high
German jobs rise all in full-time employment unlike in UK, Ireland
ECB to consider QE in January; Cuts forecasts
ECB and Bank of England keep rates at record lows
ECB Meeting: Draghi may reaffirm plans for QE or fudge it
Eurozone retail sales volume up in October - remains at 2004 level
German manufacturing wages are the highest of big industrial nations
Germany, France and Italy call for EU directive on tax reform
Manufacturing PMI surveys show Germany, France & Italy contracted in November
Eurozone inflation fell to 0.3% in November; Jobless rate in Germany lowest in Europe in October
German consumer climate improving as year draws to close
France's 10-year bond yield below 1% for first time; Draghi pushes for economic union
German employment at record high
Eurozone leading index fell in October; ECB to decide on QE early in new year
European Commission announces €315bn Investment Plan to get Europe growing
German Bundesbank calls for end to special treatment for sovereign bonds
Lux Leaks: European Commission facing censure motion in European Parliament
Euro bond yields fall to new record lows; Spain below 2%; Ireland at new record
German business climate improves for first time since April
British professor wants ECB to give every adult Eurozone citizen €500
Strong data from US this week and weak data elsewhere
Eurozone manufacturing/ services slowed to a 16-month low in November
European cars sales up in October for fourteenth consecutive month
German ZEW sentiment indicator jumps in November
Belgium accuses HSBC Private Bank of money laundering/ tax evasion
GDP up by 0.2% in Eurozone in Q3 2014 and up by 0.3% in EU28
German GDP up 0.1% in third quarter of 2014; France up 0.3%
European Commission expected to say Starbucks got special tax deal from Netherlands - Update
Juncker on Corporate Tax: Poacher-turned-gamekeeper proposes new rules
Eurozone industrial production in September recovers slightly from August slump
Architect of tax "racket" to commit EU to fight against tax fraud
German GDP growth will be below 1% in 2015; Former East still lags
Ireland accounted for 25% of ECB's emergency lending by time of 2010 bailout
Luxembourg Leaks: Irish Government's guff on tax system exposed; "Racket" needs to stop