June 3, 2012
Gloom continued over the euro zone Monday, as Portugal cut its growth forecast and announced a recapitalization of its biggest banks, while pressure built for greater integration in Europe to help stem the region’s debt crisis.
Finance Minister Vitor Gaspar of Portugal said Monday that gross domestic product was expected to grow next year by 0.2 percent, down from the 0.6 percent growth it estimated in late April. He also forecast that the country’s debt would peak next year at 118.6 percent of gross domestic product, 3 percentage points worse than expected.
Portugal’s economic restructuring “remains on track amidst continued challenges,” the International Monetary Fund said in a statement. “The authorities are implementing the reform policies broadly as planned and external adjustment is proceeding faster than expected.”
Portugal last year sought 78 billion euros, or $97 billion, from the European Union, the European Central bank, and the International Monetary Fund after a loss of confidence in its public finances left it unable to access the bond market. Of the funds, 12 billion euros was earmarked to repair banks’ tattered balance sheets.
Three banks — Millennium, Banco B.P.I. and Caixa Geral de Depositos — will draw a combined 6.7 billion euros to help them meet new capital requirements. The Finance Ministry said they would be “among the best capitalized in Europe” after the transactions were completed.
Mr. Gaspar also told journalists in Lisbon that Portugal would stick to the tough bailout agreement whatever comes: “There are considerable internal and external risks,” Reuters quoted him as saying. “The only certainty we have is that we need to focus on meeting the targets of the program.”
Still, the fund warned that rising unemployment in Portugal “has emerged as a pressing concern.”
The news Monday came after a weekend in which the German chancellor, Angela Merkel, sought to rebuff the growing pressure for action from Germany to halt the run on Spanish banks. One idea that has gained increasing traction of late is for the 17 euro nations to jointly issue some kind of debt that could be used to guarantee the finances of struggling members.
But Ms. Merkel told her party on Saturday that “under no circumstances” would she agree to such bonds, Bloomberg News reported.
Mariano Rajoy, the Spanish prime minister, called Saturday for centralized budget control and the creation of a banking union in Europe as steps toward calming markets. Euro zone countries should “cede more sovereignty” to a central fiscal authority, Bloomberg News quoted Mr. Rajoy as saying.
Pierre Moscovici, the French finance minister, said Sunday in an interview on RTL radio that aid to Spain’s banks should pass through the European Stability Mechanism — the new bailout fund that is to come on line in July — rather than through aid to the Spanish government, as Ms. Merkel desires.
Mr. Moscovici also said it was the desire of President François Hollande that Europe adopt a banking union.
In Berlin, a German government spokesman said Monday that Spain should decide whether to seek an international bailout. His remarks came after the newsmagazine Der Spiegel, in a weekend report, said Mrs. Merkel and Wolfgang Schäuble, her finance minister, were pushing Spain to ask for a bailout.
“Everyone knows that Europe is ready,” Bloomberg News quoted Steffen Seibert, a spokesman for Mrs. Merkel, as saying. “But the decision lies with the Spanish government alone.”
Marco Valli, chief euro zone economist at Unicredit in Milan, said European officials were not focused well enough on the problems at hand.
“There are two very urgent topics that needed to be addressed if the euro is going to be saved,” he said: one the creation of a pan-European bank deposit program, and the other the necessity of using the European Stability Mechanism for recapitalizing banks directly.
“Questions about a single regulator, supervisor or resolution authority is something for the medium- or longer-term,” he said. “It could take a couple of years.”
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Vítor Gaspar was born on November 9th, 1960 according to http://en.wikipedia.org/wiki/Vitor_Gaspar
November 9th, 1960
11 + 9 +1+9+6+0 = 36 = his life lesson = Debt. Default.
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November 9th, 1960
November 9th
11 + 9 +2+0+1+1 = 24 = his personal year (from November 9th, 2011 to November 8th, 2012) = Eurozone. Who’s in charge?
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comprehensive summary and list of predictions for 2012:
http://predictionsyear2012.com/
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