The EU is considering a fund to defend the euro
Meeting in Brussels, the Heads of States of the euro area have finally approved the activation of the financial assistance plan 110 billion euros to Greece three years. According to several government sources, the leaders have also discussed the establishment of a fund to help countries threatened to defend the euro. The European Commission could contribute in the form of loans to the tune of 70 billion euros. The European Central Bank (ECB) will also participate.
"Attack of the market is now against the euro and individualized assistance to any country may give an insufficient response of Europe, the priority is a unified response, firm and fast," said one in particular these sources on condition of anonymity.
If agreement seems to have been found on Friday on the need to establish a sustainable mechanism for defending the single currency, the heads of states still fail to agree on every detail. "The discussion focuses particularly on the role of the ECB," said a source close to the talks
Pressure on ECB
All eyes are turned to the ECB effect. The other track would be mentioned that the latter buys bonds issued by states of the euro area, to provide them in exchange for cash. According to these same diplomatic sources, the European Commission would currently pressuring the ECB to make sense in a concrete proposal to support the euro area.
On Monday, the ECB announced it would accept the Greek debt as collateral for its loans, regardless of their credit ratings.Extending this unprecedented step for all countries in the euro area "would be a strong signal to markets" would have said the president of the European Commission Jose Manuel Barroso. But on Thursday, the ECB said it had not considered.
At the meeting this Friday, the president of the European Central Bank Jean-Claude Trichet, have estimated that the eurozone faced a "systemic crisis" easy payday loans.
Tighten fiscal discipline
The euro zone leaders agree at least on the need to tighten fiscal discipline. A commitment to ensure that "Greece is not only to reduce its deficits, but that we work so that all the Stability and Growth speedy again respected," said German Chancellor Angela Merkel in Brussels.
Leaders also stressed the need for better coordination of economic policies in the euro area. Finally the sixteen Heads of State and Government reiterated their determination to "move quickly on the regulation and supervision of financial markets. They also insist on the creation of "a European rating agency.
Barack Obama supports the EU
Moreover, since the White House is that Barack Obama supported the European heads of state on Friday. "I made it clear that the United States supports these efforts and will continue to cooperate with EU authorities and the IMF during this critical period," he said, after talks with Angela Merkel.
American concerns grew at the same time as the market stress.Wednesday, Charles Plosser, a leader of the U.S. central bank (Fed) has assured that "the economic recovery of the U.S. could be delayed by a further turmoil in financial markets. Recent events in Greece are one of the factors likely to influence the evolution of the U.S. economy. "
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