French President Nicolas Sarkozy heads into decisive talks on Europe's debt crisis handicapped by concern that France's top credit rating is at risk. Oct. 19 (Bloomberg) -- European banks, assuring investors they can weather the sovereign debt crisis by selling assets and reducing lending, may not be able to raise money fast enough to prevent government-forced recapitalizations. NEW YORK/MADRID, Oct 19 (Reuters) - Moody's cut Spain's sovereign rating by two notches, citing the country's vulnerability to the euro zone debt crisis and piling pressure on EU leaders to act decisively at a summit this weekend.
While Sarkozy's banks have the most to lose if a potential Greek default triggers contagion, moves to expand rescue efforts or recapitalize banks at government expense add to pressure on French finances. A rating cut may also hinder Sarkozy's re- election bid in 2012.
"It's a classic trap of contagion that is now closing in on France," Philippe Martin, an economics professor at the Institute of Political Studies in Paris, said in an e-mail yesterday. "This is very dangerous. Everyone in the government has insisted that everything they do is with the objective of keeping the triple-A. If they lose it, it's a disaster."
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/19/bloomberg_articlesLTB3IX6JIJUR.DTL
Banks in France, the U.K., Ireland, Germany and Spain have announced plans to shrink by about 775 billion euros ($1.06 trillion) in the next two years to reduce short-term funding needs and comply with tougher regulatory capital requirements, according to data compiled by Bloomberg. Morgan Stanley predicts that amount could reach 2 trillion euros across Europe by the end of next year as banks curb lending and sell loans and entire businesses. A lack of buyers and the losses lenders face on loan sales are making those targets unrealistic.
"Asset sales are impractical in the current environment," said Simon Maughan, head of sales and distribution at MF Global UK Ltd. in London. "Every bank is selling, and no bank is buying. It just won't work. Beyond that, the magnitude of the cuts the banks are talking about is nowhere near the likely required amount of deleveraging. They need to reduce hundreds of billions more to adjust to the new world order. There has to be a recapitalization."
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/19/bloomberg_articlesLTB86H1A74E9.DTL
http://www.reuters.com/article/2011/10/19/spain-ratings-moodys-idUSN1E79H1YC20111019
EU must agree 'vigorous' response at summit: Barroso
European leaders must agree a "vigorous" response to protect Spain at a summit this weekend, the head of the EU executive said Wednesday as France and Germany differ on how ambitious they need to be.
Sunday's summit must deliver "a vigorous response to give guarantees to all countries, notably Spain," European Commission president Jose Manuel Barroso said as he set out ideas for boosting growth across the European Union over the next decade.
http://www.expatica.com/fr/news/french-news/eu-must-agree-vigorous--response-at-summit-barroso_182997.html
http://www.thetimes.co.uk/tto/news/politics/article3199034.ece
David Cameron was facing a battle with his party last night over the suggestion that he would order MPs to vote against a referendum on Britain’s membership of the EU. As many as one in eight Conservative politicians may defy the Prime Minister in the most significant vote over Europe since the coalition was formed.
One Eurosceptic Tory MP, Priti Patel, warned that Mr Cameron risked creating “animosity” within his party if he blocked MPs from acting freely. The warning came as Boris Johnson, the Mayor of London, claimed that it would be “absolutely crazy” for members of the eurozone to intensify their fiscal union.
The Commons debate will take place next Thursday after more than 100,000 members of the public signed a petition calling for a referendum on Europe. The Backbench Business Committee agreed yesterday that the issue should be addressed in Parliament. The motion, which was put forward by David Nuttall, a Tory MP, will call for a referendum offering the public three options for Britain to stay in the EU, to leave it, or to renegotiate the terms of its membership.
The Prime Minister’s official spokesman said that the Government had a clear policy on Europe set out in the coalition agreement, which did not include an in-out referendum. “We would expect MPs and ministers to follow government policy,” he said.
Ms Patel said that the vote was long overdue. “It gives us a chance to restore public faith in Parliament and show that we are on the side of the people.”
Large numbers of Tory MPs would back the motion if it was a free vote. But even under a three-line whip the rebellion could be significant.
Tim Montgomerie, editor of the ConservativeHome blog, suggested that 30 or 40 MPs would back the motion and that could have a knock-on effect. “When people get in the habit of defying the Government it could build up problems in the future,” he said.
Comments (11)
October 19, 2011 10:44 AM
You were keen enough to accept the result of the election which is, ipso facto, a referendum.
Now get the opinion of the electorate on the EU and become the first government to give us a choice. Blair, Brown and others have denied us this opportunity now it looks like you will as well.
In simple terms Downing Street turns leaders into self centred, know-all, dictatorial politicians.
The will of the people? Cobblers
October 19, 2011 9:50 AM
I bet when David Cameron was given out when playing cricket, he took his bat & ball home.October 19, 2011 9:49 AM
We could balance our books in very short order if we were out of the stinking mess called the EU. Not only because of the money we would no longer have to pay into this cesspit but all the deregulation we could bring in to help our beleaguered business and then we could scrap the human rights rubbish and be a free and great country once again in charge of our own destiny.
We must get out of this corrupt den of interfering moronic control freaks.
October 19, 2011 8:24 AM
What is going on here is nothing less than a slow-motion coup d'etat and any politician refusing a referendum is a traitor.
October 19, 2011 8:03 AM
When are these self appointed "experts" who were elected by the public going to understand they are there to serve not dictate what they think is best. ?
I believe that most people who voted to join the Common Market was to join just that not some self serving bunch of bureaucrats who are telling us what to do, when to do and extract vast sums for the privilege.
Lets have a bit of get real Mr Cameron, the public wish you to do as they want - have a reforendum or to be sure this will be a black mark on your premiership forever and will probably lose you the next election.
October 19, 2011 7:44 AM
When I was young and WW2 was finished I often wondered what the difference was between a DEMOCRACY and a DICTATORSHIP. Now I am older and wiser I understand THERE ISN’T ONE.
It is time we got the whole thing of our relationship with Europe and the EU resolved once and for all. The only way is give the people a say, a referendum.
October 19, 2011 6:25 AM
Is this the same Dave that promised a 'cast iron guarantee' on the EU, then broke his promise?
An MP's word is worth literally nothing.
Why does anybody bother voting? All they ever do is what THEY want and not what the PUBLIC wants.
October 19, 2011 1:55 AM
Someone needs to tell Mr Cameron that if he does order his MPs to vote against a referendum, then his credibility is finished. What is this debate for? It is for the public interest, not the interest of the Conservative Party.
October 19, 2011 7:46 AM
The antics of Flip Flop these past few months have been truly pathetic.I can't remember when there has been so much dithering and indecision in so many matters, including trying to stem the current raging inflation.Dave, I think your motto must be "I used to be undecided, but now I'm not so sure!".
I await with baited breath the arrival of the next ministerial fiasco that I suspect is already approaching the horizon.Lawrence
October 19, 2011 12:45 AM
‘’As many as one in eight Conservative politicians may defy the Prime Minister’’. I would have thought that the meaning behind the above words could better be expressed thus: As few as one in eight Conservative politicians may obey the British people.
Fortunately, we can rely on the support of the Liberal Democrats, every one of whom was elected on a manifesto pledge, the foundation of their democratic legitimacy, to hold a referendum on our membership of the European Union.
As for the idea of having three options in a referendum, what would happen in a majority voted to leave the EU or to renegotiate our membership, but the option with the single largest number of votes was the first, to remain in the EU?
October 18, 2011 11:08 PM
Makes you proud to be British when the PM has the backbone of an eel. Come on Cameron show your worth and why we should re-elect you in 4 years time (or less). Stop this ridiculous pussy footing around. Your chances are diminishing each time you either U turn or simply bottle-out.
Wednesday, 19 October 2011
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