european union treaties

Global Stocks and Euro Rise Sharply

Germany and France have been discussing a deal to fast-track European budget and financial coordination, hoping that a deal that avoids the need for renegotiating European Union treaties could reassure markets and bring skeptics at the European Central Bank on board to support the beleaguered euro.

Investors were awaiting a meeting later Monday in Washington of President Obama and European Union officials, where discussions of the financial crisis were expected to figure prominently. Rumors of preparations for an International Monetary Fund bailout of Italy — even though quickly denied by the fund — also contributed to a sense that official efforts to stabilize the euro were progressing.

Alessandro Frigerio, a fund manager at R.M.J. Sgr in Milan, said he had been “almost certain” that the market would rally before Dec. 9, when European leaders hold a summit meeting to discuss the sovereign debt crisis.

“The market had been selling off for weeks on all the talk and rumors,” he said. “Now, we’re going to start getting some facts,” including more detail on the European Financial Stability Facility, the primary euro-zone bailout vehicle, and Italy’s plans to pay down its debt.

“I don’t know how the market will react after it gets the facts, though,” he said. “We’ll see when we get them.”

Investors shrugged off dire warnings from the Organization for Economic Cooperation and Development and from Moody’s Investors Service, both of which warned that the euro-zone problems were well on their way to becoming serious issues for non-euro countries.

They also ignored another dismal debt offering in Italy, where the Treasury paid 7.20 percent to sell 12-year bonds, 2.7 percentage points above what it paid at a similar auction in October.

In afternoon trading, the Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 4.2 percent, while the FTSE 100 index in London gained 2.3 percent.

Standard Poor’s 500 index futures rallied, suggesting a strong start later on Wall Street. The S.P. 500 fell 0.3 percent on Friday.

Earlier in Asia, the Hang Seng index in Hong Kong rose 2 percent, while the composite index in Shanghai added 0.1 percent. The S.P./ASX 200 in Australia closed 1.9 percent higher, while in Tokyo, the Nikkei 225 stock average rose 1.6 percent, finishing the day at 8,287.49 points, despite comments from the central bank governor, Masaaki Shirakawa, that the prospects for the Japanese economy remained poor.

Global stock markets have slumped in recent weeks, as the European debt crisis began to move from small, peripheral economies like Greece and undermined confidence in larger euro zone members, like Italy and even France.

In a dire report issued Monday, the O.E.C.D. said that “the euro-area crisis remains the key risk to the world economy.”

If concerns about the euro are not addressed, “contagion to countries thought to have relatively solid public finances could massively escalate economic disruption,” the report said. “Pressures on bank funding and balance sheets increase the risk of a credit crunch.”

That followed a similar warning from Moody’s about the increasing severity of the European debt crisis.

“While the euro area as a whole possesses tremendous economic and financial strength, institutional weaknesses continue to hinder the resolution of the crisis and weigh on ratings,” Moody’s said in a report
on Monday. “In terms of the policy framework, the euro area is approaching a junction, leading either to closer integration or greater fragmentation.”

Still, markets were helped by news of unexpectedly strong consumer spending over the Thanksgiving holiday weekend — a key shopping period for American retailers.

The National Retail Federation said Sunday that spending per shopper surged 9.1 percent over last year — the biggest increase since 2006 — to an average of almost $400 a customer. In all, 6.6 percent more shoppers visited stores on the Thanksgiving weekend than last year.

Article source: http://feeds.nytimes.com/click.phdo?i=1afb88d99f98d8acc9d785fda0194df9

Greeks Direct Anger at Germany and European Union

Here in Greece, anger is running so high — especially toward Germany, whose Nazi occupation still leaves deep scars here and who now dominates the European Union’s bailout of debt-ridden Greece — that National Day celebrations were called off on Friday in the northern city of Thessaloniki for the first time ever after crowds shouted “traitor” to the Greek president, Karolos Papoulias.

“I was the one fighting the Germans,” Mr. Papoulias, 82, said on national television. “I am sorry for those who cursed at me. They should be ashamed of themselves. We fought for Greece. I was an insurgent from the age of 15. I fought the Nazis and the Germans, and now they call me a traitor?”

Beyond populist talk, which ranges from euro-skepticism to anti-German demagoguery, experts say the concessions that Greece has made in exchange for the foreign aid it needs to stave off default — including allowing European Union officials to monitor Greek state affairs closely — are unprecedented for an member nation, making Greece a bellwether for the future of European integration.

The European superpowers Germany and France are trying to translate the new deal, to accept a loss on part of Greece’s debt, into changing European Union treaties to give the union greater oversight of national budgets and to create tougher, more easily enforceable rules for countries that go astray.

After years of pay cuts and tax hikes that have pushed the Greek middle class to the breaking point, Greeks are not inclined to feel grateful to the so-called troika of foreign lenders — the European Union, European Central Bank and International Monetary Fund — that demanded austerity in exchange for loans. Instead, they increasingly feel they have become a de facto European Union protectorate.

“If we weren’t under the E.U., which is the only reason this loss of sovereignty may be justified, I’d have to say that Greece is an occupied country,” said Nikos Alivizatos, a constitutional lawyer in Athens.

Such feelings run so deep that after reaching a deal in Brussels this week for banks to accept a 50 percent loss on the face value of their Greek bonds, Prime Minister George Papandreou took great pains to explain that a new agreement — a troika presence until 2020 — would only offer technical assistance and was not tantamount to Greece relinquishing control of its fate.

“Nothing in this deal sacrifices our right to take our own decision. On the contrary, it will pave the way for us to freedom from dependency,” Mr. Papandreou said in a televised address.

But few Greeks agree. “Our politicians are just employees, simple employees,” said Margarita Tripolia, 17, a high school student who marched in the National Day parade. She, like other students, turned her face away from representatives of the government, church and military outside Parliament in a silent protest against the austerity measures and the direction the country was going.

But the sovereignty question goes far beyond street protest.

One highly delicate, unresolved question, in negotiations between the European Union and banks over the Greek debt deal, is whether future Greek bonds would be governed by international law, not Greek law, which currently governs 90 percent of Greek bonds. Such a change — aimed at preventing Greece from changing its laws to the detriment of creditors — would be unprecedented for a European Union member country.

Some argue that greater oversight is needed for Greece to push through the structural changes it promised in exchange for foreign aid. They say some loss of Greek sovereignty is a small price to pay considering that the new debt deal and eventual recapitalization of some banks comes at the expense of taxpayers from other European countries.

Dimitris Bounias contributed reporting.

Article source: http://www.nytimes.com/2011/10/29/world/europe/greeks-direct-anger-at-germany-and-european-union.html?partner=rss&emc=rss

Global Stocks and Euro Rise Sharply

Greeks Direct Anger at Germany and European Union

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