August 18, 2012
By Becket Adams
You know what was nice about the last couple of weeks? Little to no eurozone news. Oh, sure, there was the usual stuff: Political impasses, compromises, bond auctions, etc., etc. But the heavy-duty, “stop-the-presses” stuff seemed to die down a bit.
Sadly, that was then, this is now. As our friends at Zero Hedge note, Euro media outlets are starting to ramp up the urgency in their headlines.
The following list of excerpts (via Zero Hedge) is definitely worth keeping an eye on (notice how things have gone from wonky to flat-out dire). If the the following headlines are at all accurate, the eurozone financial crisis is about to get real interesting, real fast:
The first five years of the global crisis are over, investors flee from complex financial products and into gold, silver and commodities. Experts warn against a false sense of security.
“We should not give us the illusion that the crisis will soon be over,” says Patrick Artus of the French bank Natixis. Years of negative developments such as the growing debt, or the de-industrialization of specific sectors should now be reversed. “Such a process takes time.”
“The euro crisis may also last 20 years,” says Arthur.
German Finance Minister Wolfgang Schaeuble said on Saturday that there were limits to the aid that could be granted to Greece and said the crisis-stricken country should not expect to be granted another programme.“It is not responsible to throw money into a bottomless pit,” Schaeuble said at a government open day in Berlin. “We cannot create yet another new programme.”
Debt crisis in Europe is bracing itself for EU € crash (via Bloomberg):
Euro-currency area countries are evaluating a multitude of reform options, Sueddeutsche Zeitung reports, citing unidentified people with knowledge of the plans.
These are to be whittled down into a coherent strategy in the “coming weeks.” If Greece exits, members will boost plans to support other vulnerable countries. Options include increasing aid to Ireland and Portugal. ECB would consider supporting Italy and Spain through bond purchases. Greece’s new start would be supported by EU funding. These questions will be discussed “in the autumn.”
Deutsche Bank AG (DBK) is among four European banks being investigated by U.S. regulators for alleged money-laundering violations, according to an attorney with knowledge of the matter. Federal regulators, including the U.S. Treasury’s Office of Foreign Assets Control, the Federal Reserve, the Justice Department and the New York District Attorney’s office are all involved in the probe of Deutsche Bank and three other European banks, said the attorney, who asked not to be identified because the investigations are confidential.
German Industry Group Head says No Place for Greece in Eurozone (via Bloomberg):
If Greece doesn’t meet IMF and EU requirements, it must leave the euro, Hans-Peter Keitel, president of Germany’s BDI industry federation, says in an interview with Wirtschaftswoche magazine. Keitel previously said Greece must stay in the euro at all costs.
Keitel says clear progress is being made in combating the euro crisis. The German federal government is not ambitious enough in its savings program, Keitel says.
Bundesbank Vice-Head Opposes Schaeuble’s Banking Proposal (via Bloomberg):
German Finance Minister Wolfgang Schaeuble’s proposal to separate traditional banks from their investment banking units isn’t possible, Bundesbank Vice- President Sabine Lautenschlaeger tells Wirtschaftswoche magazine.
Both types of banks would still be dependent on market confidence, Lautenschlaeger says. Lautenschlaeger favors an investigation into the relationship between lenders and those banks which trade in unregulated financial products.
Westerwelle Opposes Relaxing Greek Aid Terms (Tagesspiegel):
Relaxation of the agreed on terms for Greek assistance would be misunderstood by countries such as Spain, German Foreign Minister and FDP member Guido Westerwelle told Tagesspiegel am Sonntag in interview.
Spanish prime minister would have difficulty passing reforms in parliament if terms were eased for Greece, Westerwelle says. Westerwelle gives his “solidarity” to the people of Greece.
The European Central Bank must take forceful and unlimited steps to buy sovereign debt to help Spain reduce its refinancing costs and eliminate doubts over the euro zone’s future, Spain’s economy minister said in comments published on Saturday. “There can be no limit set or at least (the ECB) can’t say how much they will use or for how long,” when it buys bonds in the secondary markets, Luis de Guindos told Spanish news agency EFE.
France Favors Greece Rescue Package, Opposing Germany (via Bloomberg):
France and southern European nations are in favor of a third rescue package for Greece should it prove necessary, Welt reports, without saying where it got the information. Germany rejects a new rescue package. Germany opposes giving Greece more time to enact cost cuts. Preparations underway for Greece possibly leaving the euro. Main consideration is how to protect other euro crisis countries from the fallout.
Oh, good. France opposes Germany’s approach to the eurozone crisis? What could possibly go wrong?