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Germany doesn’t want the Eurozone to go under
His remarks followed a further widening of government bond yield spreads, with markets demanding a higher premium for lending to governments such as Ireland that are under severe fiscal strain. The cost of insuring against default on sovereign debt issued by Ireland soared to record levels in recent days. Germany has the best credit rating in the European Union, while some other Eurozone countries, such as Ireland and Greece were trapped into bad credit rating as a result of the world economic crisis, European Commission officials said. Her sharp tone came as she was preparing to host the EU’s economic leaders in Berlin on February 22 for a mini-summit amid fears of a financial short-circuiting of the markets, particularly in central and Eastern Europe, which have been the hardest hit so far. EU’S DECLINE AND FALL The meeting was aimed at finding yet further ways of combating the financial crisis and the near-depression that continues to grip the world, putting banks and businesses on the edge of bankruptcy everywhere, despite trillions of dollars, Euro, yen, pounds, and most every other major currency being poured into round after round of bail-outs that haven’t worked yet. What’s most worrying the EU now though is a fall in the Euro caused by sell-offs in markets across the so-called CEE states in central Europe, particularly because banks there and those elsewhere in the EU who have supported them, such as Austria and the Czech Republic. That has EU leaders scrambling to find ways to shore up financial systems in the CEE. That was likely to mean better coordination between key international institutions such as the IMF and the European Bank for Reconstruction and Development, although some analysts and economists said they believe that crumbling economic growth, escalating unemployment, rising budget deficits and falling foreign investment could trigger further turmoil on CEE financial markets and result in another round of falls in currencies and shares. Five years ago, the EU added 10 new members, including those now most affected by the relentless crisis. For a few years, some of those countries, such as the Baltics, were referred to as economic tigers because of near double-digit growth and what seemed like a rapid rise from former Communist satellites to capitalist success stories.But now they are on the brink of collapse and have already taken one government with them as the prime minister of Latvia resigned as his country’s economy fell into the gutter, a prime candidate for what Merkel hopes will not be a Eurozone bail-out to go along with those for banks and auto industries. Indeed, another round of indicators released February 20 pointed to the economic downturn gaining momentum across Europe with confidence in the 16-member Eurozone manufacturing and services sector slumping. Business confidence in France plummeted to its lowest level in more than 40 years, a survey showed. Among factors under consideration are steps to strengthen global financial accountability and disclosure measures as well as moves to monitor all major cross- border financial institutions, including the creation of new financial market watchdogs to be called college of supervisors. EU eyes excessive deficits Finance ministers debate post- recession exit strategies EU dairy farmers call from Paris for a strike EU gives Zimbabwe’s poor 8 million ways to live Almunia says EU’s banks need a stress test too |
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