The leaders of the European Union have agreed to a deal that would allow bailout funds to go directly to struggling banks instead of the governments of member nations.
They also created a joint banking supervisory board after meeting for 13 hours. Continue reading
A creation of a European treasury is one of the key components of a new plan to create a monetary union for the members of the euro zone. The European treasury would have power over the budgets of individual countries.
“[This is] a defining moment for European integration,” European Commission President Jose Manuel told reporters. Continue reading
Ratings firm Finch has cut the rating of the country of Cyprus to junk status. The cut is believed to be in response to Cyprus banks holding much of the real estate debt of Greece.
Fitch states that Cyprus will need at least 4 billion euros to support its banks on top of 1.8 billion euros needed to recapitalize its lender Cyprus Popular Bank. The bank needs and the junk rating will make it almost impossible for the country to borrow from international markets. Continue reading
European Commission President Jose Manuel Barroso is pushing for a closer union among the member nations.
“I am not sure whether the urgency of this is fully understood in all the capitals,” Barroso said. He said the euro zone is facing a “systemic problem” and that a closer union would be necessary to forge a “vision of where we need to go.”
Barroso praised the EU’s quick response over the weekend in providing a bailout to Spain calling it an example of the EU’s “ability to act quickly.” Continue reading
Another member of the euro zone is on the verge of needing an EU bailout.
Cyprus has directly impacted the debt load in Greece due to loans taken from it’s banking system.
“The possibility of addressing financial stability mechanisms to support the banking system, due to the problems created by excessive exposure of banks to Greece, is a serious responsibility,” Cyprus spokesman Christos Christofides told a press conference. Continue reading