| 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

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.


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: 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

© Copyright 2011 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
FDI into western Europe declined between March and May 2014
Eurozone annual inflation stable at 0.5% in June - down from 1.6% in 2013
Eurozone construction activity fell in May
Eurozone is recovering; Deep-seated obstacles to growth remain says IMF
German economic sentiment fell for seventh straight time in July 2014
Industrial production down by 1.1% in Eurozone and EU28 in May
French industrial production plummeted in May
Germany's exports, imports and industrial production fell in May
European industrialist urges ECB to tackle “crazy” strength of euro
Eurozone retail sales PMI flat in June as falls in France and Italy offset German gains
European Central Bank keeps rates unchanged
Business activity in the Eurozone service sector eased in June
France and Italy need to cut unit labour costs by 15% and 20% to match Spain and Slovenia
European Union and Switzerland bury "the hatchet" on corporate taxes
Eurozone unemployment at 11.6% in May; Lowest: Austria 4.7%, Germany 5.1%; highest: Greece 26.8%
Eurozone manufacturing output losing momentum; June regional easing, dips in France and Greece
Eurozone annual inflation at weak 0.5% in May; German retail sales fell in month
Eurozone's money supply and private credit slightly improved in May
Centenary of gunshots that ended 43 years of fragile European peace
US real consumer spending falls for second month in May
German consumer sentiment at highest in more than seven years
German Ifo business confidence index dipped in June
Eurozone growth weakest since December despite strengthening "periphery"
Irish prices 18% above EU average in 2013 despite lone fall in 2008-2012
German investor sentiment dipped to 18-month low in June
Debt-challenged Eurozone facing long period of low growth
Eurozone industrial production rebounded in April
Germany's goods exports grew strongly in April; French exports fell
Draghi announces extraordinary measures to head off deflation/ raise growth prospects
ECB cuts benchmark rate to 0.15% and deposit rate to -0.10%; Bank of England keeps rates on hold
Eurozone retail sales PMI was stagnant in May; Official data shows rise in April
ECB to act; German Bund yields near lowest since 1815 Battle of Waterloo
Eurozone unemployment fell slightly in April: Lowest in Austria at 4.9%, highest in Greece at 26.5%
Eurozone annual inflation falls to 0.5% in May
Eurozone manufacturing PMI falls as France contracts; Eases in Germany, Italy, Greece
Germany, UK and France are Europe's most popular locations for FDI
German consumer confidence positive and stable heading into June
German business confidence dropped in May
Germany's Schäuble opposes ECB's OMT bond-buying program
Eurozone manufacturing/ services PMI down slightly but still ahead of official data