Britain at Risk of Another Financial Crisis, Bank of England Chief Warns
THE DAILY TELEGRAPH: Britain risks suffering another financial crisis without reform of the country’s banks, the Governor of the Bank of England warns today.

In an interview with The Daily Telegraph, Mervyn King says that “imbalances” in the banking system remain and are “beginning to grow again”.

Mr King urges high street banks to take a better, longer term view towards their customers and to stop focusing on the need to “simply maximise profits next week”.

He accuses them of routinely exploiting their millions of customers. “If it’s possible [for financial services firms] to make money out of gullible or unsuspecting customers, particularly institutional customers, [they think] that is perfectly acceptable,” he says.

The Governor criticises the “weight put on the importance and value of takeovers” and raises concerns that companies with good reputations have been “destroyed” in the search for short-term profits.

Mr King expresses regret for not sounding a louder warning over his concerns before the last banking crisis.

The Governor’s remarks are a warning to George Osborne, the Chancellor, as a government commission considers whether to force high street banks to sell off their investment banking arms. Continue reading and comment >>> Robert Winnett, Deputy Political Editor | Friday, March 04, 2011

Financial Crisis Was Avoidable, Inquiry Finds
The commission’s report finds fault with two Fed chairmen: Alan Greenspan, right, a skeptic of regulation who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke, who did not foresee the crisis but then played a crucial role in the response to it. Photograph: The New York Times
THE NEW YORK TIMES: WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.

The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.

“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”

While the panel, the Financial Crisis Inquiry Commission, accuses several financial institutions of greed, ineptitude or both, some of its gravest conclusions concern government failings, with embarrassing implications for both parties. But the panel was itself divided along partisan lines, which could blunt the impact of its findings.

Many of the conclusions have been widely described, but the synthesis of interviews, documents and testimony, along with its government imprimatur, give the report — to be released on Thursday as a 576-page book — a conclusive sweep and authority. >>> Sewell Chan | Tuesday, January 25, 2011

EU Rescue Costs Start to Threaten Germany Itself
THE DAILY TELEGRAPH: The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.

Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.

"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."

The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag.

While Germany's public and private debt is not extreme, it is very high for a country on the cusp of an acute ageing crisis. Adjusted for demographics, Germany is already one of the most indebted nations in the world. Read on and comment >>> Ambrose Evans-Pritchard | Friday, November 26, 2010

Lord Young Resigns After 'Never Had It So Good' Gaffe
THE DAILY TELEGRAPH: Lord Young, peer and enterprise adviser to David Cameron, has resigned after coming under fire for claiming most people have "never had it so good".

Lord Young. Photo: The Daily Telegraph
The peer reflected on his comments, revealed exclusively in The Daily Telegraph today, and offered his resignation to the Prime Minister.

Mr Cameron accepted his resignation, a spokeswoman said.

Speaking to The Daily Telegraph, Lord Young had said a drop in mortgage rates "since this so-called recession" had left most people better off.

He added "people will wonder what all the fuss was about" when looking back at the Government's spending cuts, the deepest in more than 30 years.

He went on to described the loss of about 100,000 public-sector jobs a year as being within "the margin of error" in the context of the 30 million-strong job market as a whole. >>> Christopher Hope, Whitehall Editor | Friday, November 19, 2010

Related >>>

Top Conservative: Recession? You've Never
Had It So Good
THE DAILY TELEGRAPH: The vast majority of Britons have "never had it so good" because of the low interest rates during the recession, Lord Young, a senior adviser to David Cameron, has declared.


Lord Young, the Prime Minister's enterprise adviser, said a drop in mortgage rates "since this so-called recession" had left most people better off. Speaking to The Daily Telegraph, the Conservative peer also said "people will wonder what all the fuss was about" when looking back at the Government's spending cuts, the deepest in more than 30 years.

He described the loss of about 100,000 public-sector jobs a year as being within "the margin of error" in the context of the 30 million-strong job market as a whole.

The remarks are likely to prove inflammatory after the worst recession in a generation which has led to a sharp rise in unemployment and resulted in millions of workers forced to accept a pay freeze.

Critics of the Coalition will seize on the comments to claim that ministers are out of touch with the impact of government cutbacks on poorer families. >>> Chistopher Hope, and Robert Winnett | Thursday, November 18, 2010

Where did they find this little fossil? It sounds to me that he is suffering from softening of the brain! People have never had it so good? What on earth is the idiot talking about? Try telling that to a man who has to feed his family. This man is living in cloud cuckoo land. – © Mark

Lord Young forced to apologise >>>

The Coalition has never had it so good, more like! >>>

And Nick Clegg’s wife’s law firm seems never to have had it so good, either! >>>

Greek Rescue Frays As Irish Crisis Drags On
THE DAILY TELEGRAPH: The eurozone bail-out for Greece has begun to unravel after Austria suspended aid contributions over failure to comply with the rescue terms, and Germany warned Athens that its patience was running out.

Thousands of Communist Party supporters wave flags during the protest rally in central Athens on November 15 against the IMF-EU troika visit in Athens and the expected new austrity package. Photo: The Daily Telegraph
The clash caught markets off-guard and heightened fears that Europe's debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue.

Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. "I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism."

Swirling rumours hit eurozone bond markets, while bourses tumbled across the world. The FTSE 100 fell 2.4pc to 5681.9, and the Dow dropped over 200 points in early trading. The euro slid two cents to $1.3460 against the dollar as the US currency regained its safe-haven status. Read on and comment >>> Ambrose Evans-Pritchard | Tuesday, November 16, 2010

TELEGRAPH BLOGS – JEREMY WARNER: Austria Tells Greece to Get Stuffed: Europe’s hastily assembled bailout fund already seems to be coming apart at the seams, and that’s before Ireland has even tapped into it. Austria is refusing to contribute to the next tranche of bailout money for Greece, citing the country’s failure to meet conditions. Yesterday it emerged there is serious slippage in Greece’s deficit reduction programme. >>> Jeremy Warner | Tuesday, November 16, 2010

EU Austerity Policies Risk Civil War in Greece, Warns Top German Economist Dr Sinn
THE TELEGRAPH: Greece’s austerity measures cannot prevent default and will lead to a breakdown of the political order if continued for long, a leading German economist has warned.

Hans-Werner Sinn, head of Germany's prestigious IFO Institute, said it was impossible to cut wages and prices by 30pc without major riots. Photo: The Telegraph
“This tragedy does not have a solution,” said Hans-Werner Sinn, head of the prestigious IFO Institute in Munich.

“The policy of forced 'internal devaluation', deflation, and depression could risk driving Greece to the edge of a civil war. It is impossible to cut wages and prices by 30pc without major riots,” he said, speaking at the elite European House Ambrosetti forum at Lake Como.

“Greece would have been bankrupt without the rescue measures. All the alternatives are terrible but the least terrible is for the country to get out of the eurozone, even if this kills the Greek banks,” he said.

Dr Sinn said Greece is an entirely different case from Spain and Portugal, which still have manageable public debts and can bring their public finances back into line with higher taxes.

“Greece would have defaulted in the period between April 28 and May 7, had the money not been promised by the European Union,” he said, describing the failure of the EU’s bail-out strategy to include a haircut for the banks as an invitation to moral hazard.

“There should be a quasi-insolvency procedure for countries. Creditors have to accept a haircut before any money flows for rescue plans, otherwise we’ll never have debt discipline in the eurozone,” he said.

Greek society has so far held together well, despite a wave of strikes and street violence in the early months of the crisis. However, unemployment is rising fast and political fatigue with such austerity policies typically sets in the second year. >>> Ambrose Evans-Pritchard in Cernobbio, Italy | Friday, September 03, 2010

The Euro Mutiny Begins
The Colosseum in Rome, Italy, where economists have openly questioned the euro's future. Photo: Google Images
THE TELEGRAPH: The rebellion against the 1930s fiscal and monetary policies of the Euro-complex is gathering pace.

Il Sole has published a letter by 100 Italian economists warning that the austerity strategy imposed by Brussels/Frankfurt risks tipping Europe into a self-feeding downward spiral. Far from holding the eurozone together, it will cause weaker countries to be catapulted out of EMU. Others will leave in order to restore sovereign control over their central banks and unemployment policies.

At worst it will blow the EU apart, leading to the very acrimony that the European Project was supposed to prevent.

For readers of Italian, it’s here.

While I don’t share the big-state Left-Keynesian perspective of these professors — nor their implicit hostility to the free market — I do agree with much of their overall analysis. >>> Ambrose Evans-Pritchard | Wednesday, June 14, 2010

Lettera di 100 economisti contro la manovra e la linea (europea) dell'austerità >>> mercoledi 16 giugno 2010

Europe Embraces the Cult of Austerity – But at What Cost?
THE OBSERVER: Eurozone finance ministers were still committed to spending their way to recovery only a few months ago. Then came the Greek debt crisis, which threatened to engulf the continent. Despite warnings from the US, Britain and its EU neighbours are braced for unprecedented public sector cuts

German Chancellor Angela Merkel is preparing her country for unprecedented cuts. Photograph: The Observer
When Angela Merkel talks about budget cuts these days she likes to invoke the "Swabian housewife" – Germany's equivalent of the parsimonious Scot. In that part of south-west Germany they have a reputation for scrimping and saving. Famously, Swabia's cooks make hearty soups out of all the leftovers in the kitchen. To the German chancellor they are the embodiments of good housekeeping.

"You can't keep living beyond your means," says Merkel. "One should simply ask the Swabian housewife."

By extolling the virtues of old-fashioned thrift, Merkel hoped last week to go some way towards explaining to ordinary Germans why they must suddenly swallow the most painful austerity pill administered by their government in generations. Last Monday, with some trepidation, she announced massive cuts of €11.2bn in 2011 and plans for a total of €80bn by 2014. Yesterday, in Stuttgart and elsewhere, the inevitable protests began on the streets.

Even for a country painfully aware, because of its history, of the danger of debt, the extent of corrective action came as a shock. "Germany has never agreed to an austerity package to this extent, but these cuts have to be made in order for the country to establish a stable economic future," Merkel said.

Across Europe other governments, scared by the Greek debt crisis, the repercussions of which imperil the very existence of the euro, have been doing the same, raising the spectre of mass layoffs in public services in the name of European unity. >>> Toby Helm, Ian Traynor and Paul Harris | Sunday, June 13, 2010

Italy’s Rude Awakening: Perhaps la Vita Isn’t Always So Dolce After All!
THE TELEGRAPH: Italy is the latest eurozone nation to be threatened by finacial woe - after Silvio Berlusconi assured his compatriots for months that they had weathered the crisis.

They were the advance guard of an army of Italians whose anger is rising as their country joins the rest of the continent struggling with the worst economic crisis of recent times.

Waving banners, blowing whistles and chanting "Shame!", hundreds of public service workers rallied outside Italy's parliament in Rome to protest against the austerity package announced by the centre-Right government of Silvio Berlusconi.

The measures aim to shave 24 billion euros off government spending in the next two years.

They include a crackdown on tax evasion and welfare fraud, a three year salary freeze for Italy's 3.4 million civil servants and substantial cuts to regional government which will almost certainly result in less money for hospitals and schools.

In pushing through the package with an emergency parliamentary decree, Italy joined Portugal and Spain in trying to fend off contagion from the crisis which has brought deadly riots to Greece and shaken confidence in the euro. The cuts are greater in scale than the £6 billion of immediate savings recently announced by Britain's new coalition government, but are comparable with what the UK may face over the next 12 months.

The protesters, mostly women, who had gathered outside Italy's lower house of parliament in Piazza di Montecitorio, a cobbled square lined with expensive hotels and boutiques, were stung by the announcement and fearful for the future.

For months Mr Berlusconi had been assuring his countrymen that Italy has weathered the global economic crisis much better than the rest of Europe.

The government's overnight switch from breezy optimism to dire warnings of "very tough sacrifices" in order to spare Italy from a Greek-style bailout, and associated international ignominy attached, made the announcement of the austerity package all the more shocking to those with most to lose. Advance guard of angry women lead Italians into European protests over austerity cuts >>> Nick Squires in Rome | Saturday, May 29, 2010

Angela Merkel 'Naive' Over Euro, Claims European Commission Chief
THE GUARDIAN: José Manuel Barosso's public criticism of German chancellor signals growing political friction across eurozone

The head of the European commission today launched a strong attack on the German chancellor Angela Merkel's handling of the euro's crisis of confidence.

José Manuel Barroso, the president of the European commission, who is believed to be supported by a majority of the 27 member states, described Merkel's campaign to reopen the Lisbon treaty as "naïve". He said that the bill of almost €900bn for rescuing Greece and shoring up the euro would have been much cheaper had Berlin acted more swiftly, and accused the German government of failing to lead public opinion in defence of thebeleaguered single currency.

Barroso's surprisingly public criticism, in an interview with Germany's conservative newspaper the Frankfurter Allgemeine Zeitung, signalled the high-level political friction in the EU over how to restore faith in the single currency.

Barroso's staff, as well as the governments of many other EU member states, think the mixture of hard line and prevarication shown by Merkel since the crisis erupted in February have made a bad situation worse. They say that swift action in February would have deterred the financial markets and contained the crisis to Greece and its sovereign debt. >>> Ian Traynor | Tuesday, May 25, 2010

FRANKFURTER ALLGEMEINE ZEITUNG: Im Gespräch: José Manuel Barroso – „Manchmal haben Krisen auch ihr Gutes“ >>> FAZ | Dienstag, 25. Mai 2010

‘We Have to Help the Greeks,’ Say French, ‘It’s Our Duty’
TIMES ONLINE: It is a gloriously sunny Pentecôte bank holiday, and hundreds of people have descended on Morschwiller-le-Bas, a suburb of the French city of Mulhouse, for its annual marché aux puces — flea market.

The eurozone crisis is hardly uppermost in their minds as they pick through the mounds of second-hand clothes and bric-a-brac, but they respond when asked, and their views could scarcely be more different from those we found in Germany, a mere 15km (9 miles) to the east.

The hard-working Germans were furious at the €148 billion euros (£126.1 billion) in loan guarantees that their Government has offered the Greeks and other states of the southern eurozone. Here in France, nobody even knows how much their Government has put up (the answer is €111 billion) and there has been scarcely a murmur of dissent.

“If we consider Europe a serious matter we have to help the Greeks,” said Jacqueline Wertz, a retired hotel worker eating pizza in the shade. “They have to have more discipline, but we have a duty of solidarity and have to help,” agreed Martial Fixalis, 39, a businessman manning his own stall.

“We’re European, and it’s our role to help others,” said Josiane Mehlen, who was queueing at a beer stand and turned out to be Morschwiller’s mayor.

There are many explanations for this Gallic insouciance. The French believe in state intervention. Like the Greeks, they have their own sizeable black economy. Unlike the Germans, they are no fiscal saints themselves. Their national debt is 84 per cent of GDP — 6 per cent higher than Britain’s.

“Money is a means to an end. If you can live well with a deficit it’s not a big problem,” chuckled Denis Fauroux, a Mulhouse lawyer, as we ate lunch in his garden and admired the distant mountains of Les Vosges.

The French, with their 35-hour working week and propensity to retire early, do not share the German work ethic evident this week in Ludwigshafen, a four-hour train ride north up the Rhine valley. “Here it’s a Latin culture. The French have more sympathy with the Greeks than the Germans,” observed Marc Sarwatka, 44, the head of a large recruitment agency, over an early evening beer in the elegant Place de la Bourse.

Nor are they such sticklers for rules, as our translator observed when a French driver sped over a pedestrian crossing. “The Germans always stop,” she remarked.

Amongst the cognescenti, there is even a certain pride that President Sarkozy pressed Angela Merkel, the German Chancellor, into backing the €750 billion bailout package. Read on and comment >>> Martin Fletcher | Wednesday, May 26, 2010

Europe Tells Britain Not to Ask for Help in a Crisis
THE TELEGRAPH: Britain has been warned it will be punished by Europe if the pound is hit by a financial crisis, after refusing to support a massive euro bail-out.

Officials from both euro and non-euro countries said Britain should not ask for help if it runs into trouble because it had not signed up to a £378 billion support fund.

French, Swedish and many Brussels officials have predicted that it is only a matter of time before Sterling is hit by the same market turbulence that came close to destroying the euro at the weekend.

Jean-Pierre Jouyet, a former French Europe minister and the current chairman of France's financial services authority, yesterday predicted only "God would help" a rudderless Britain after it snubbed its euro zone neighbours.

"There is not a two speed Europe but a three speed Europe. You have Europe of the euro, Europe of the countries that understand the euro ... and you have the English," he said.

"The English are very certainly going to be targeted given the political difficulties they have. Help yourself and heaven will help you. If you don't want to show solidarity to the euro zone, then let's see what happens to the United Kingdom." >>> Bruno Waterfield in Brussels | Tuesday, May 11, 2010

Alistair Darling Trapped in Euro Deal
THE TELEGRAPH: Alistair Darling has agreed to consult directly with George Osborne and Vince Cable as European leaders looked poised to push through a new multi-billion pound bail-out fund part-financed by British taxpayers.

Mr Darling, who is still officially Chancellor of the Exchequer, will represent Britain at an extraordinary meeting of European finance ministers in Brussels today, slated to adopt far-reaching new powers for the Commission and its fellow bodies.

The meeting is the first major policy test for the hung parliament, coming with Britain in limbo between two governments. In a sign of the highly unusual nature of the situation, the Chancellor has privately committed to consulting before the meeting with his counterparts in the Conservatives and Liberal Democrats.

However, despite the likelihood that Labour will be ejected from Downing Street imminently, Mr Darling will have the final say over Britain's vote on participation in the new scheme.

The proposal, tabled by Nicolas Sarkozy in an emergency meeting late on Friday night, will involve the creation of a €60bn "European stabilisation mechanism" designed to provide bail-out support for countries which may face similar strain to Greece in the coming months.

It is thought to be focused particularly on Spain and Portugal, both of whose leaders fear an assault by "bond vigilantes" in the market who have scented weakness within the eurozone. The plan will have fiscal implication for all European Union countries, including the UK. The key element is an extension of an existing bail-out package, already used to support Hungary and Latvia. >>> Edmund Conway and Bruno Waterfield | Saturday, May 08, 2010

Helmut Kohl: Warum wir Griechenland helfen müssen
WELT ONLINE: Für Altbundeskanzler Helmut Kohl steht außer Frage, Griechenland zu helfen. Schließlich gehe es um den Zusammenhalt Europas und das Fundament für eine stabile, erfolgreiche Zukunft. Auf WELT ONLINE schreibt er, wer Griechenland heute Beistand verweigere, versage vor den nachfolgenden Generationen.

Es ist gar keine Frage, dass wir in der aktuellen Krise Griechenland nicht allein lassen dürfen, sondern dass wir in Europa unserem Partner Griechenland solidarisch helfen müssen. Das liegt auch in unserem wohlverstandenen deutschen Eigeninteresse.

Wir müssen gerade in der aktuellen Krise bedenken, was das gefestigte Haus Europa und der Euro für uns alle, für Deutschland, für den Kontinent und für die ganze Welt bedeuten.

Mit anderen Worten: Wer Griechenland heute Beistand und Hilfe versagt, versagt vor der Welt und den nachfolgenden Generationen, denn er gefährdet das Haus Europa in seinen Grundfesten.

Das gefestigte Haus Europa kann uns nicht gleichgültig sein, denn es ist unsere Zukunft. Das dürfen wir nie vergessen. Wer wie ich den Krieg als junger Mensch mit all seinen Schrecken und seiner Not erlebt hat, kann aus eigener Erfahrung ermessen, welchen Wert das geeinte Europa für Frieden und Freiheit hat. >>> Dr. Helmut Kohl | Samstag, 08. Mai 2010

In der aktuellen Debatte über die Hilfen für Griechenland hat Bundeskanzler a.D. Dr. Helmut Kohl seine Position zusammengefasst, die er beim offiziellen Festakt zu seinem 80. Geburtstag am Mittwoch in Ludwigshafen dargestellt hat.

WIKI: Helmut Kohl >>>

Verbunden / Related:

THE WALL STREET JOURNAL: Zeal and Angst: Germany Torn Over Role in Europe >>> Marcus Walker and Matthew Karnitschnig | Saturday, May 08, 2010

‘Greece Is Like a Rat’s Tail. It Will Come Round to Hit Us’
TIMES ONLINE: Eleni is busy. Beyond the doors of the kitchen you can make out her gentle bullying: agape mia, she seems to be saying, my dear, where are the dolmades for Table 3? And back in the restaurant, with its murals of the blue Aegean, she flits from alcove to alcove listening to the sour jokes from her German customers — “Eleni, don’t expect me to pay the bill for the next three years, you Greeks are already emptying our pockets.” The Germans may be angry with the Greeks but they are not about to go without their ouzo. As the country approaches a critical election tomorrow it is becoming clear that bailing out Greece has become a key issue for Germans. “It’s the dominant topic,” says Klaus-Peter Schöppner, the head of the Emnid polling institute. “People are asking what happens to us if we don’t help the Greeks?”

Other questions are beginning to nag the Germans, too: how much Europe do we really need? Suddenly the European project that was for so long the preserve of the elites — the scrapping of the mark, EU eastward enlargement — has become a matter of public debate. It was instructive to study the faces of German trade unionists on May Day as they made their routine pledges of proletarian support to Greek workers; the cameras captured the bemusement of the listening crowds. Solidarity with the Greeks? Paying them money from our taxes so that they could retire in their late fifties while we slog on until 67? Precisely what European idea makes that possible?

The vote that is bringing these doubts to the surface is being held in North Rhine-Westphalia, a region that encompasses the once heavily industrialised Ruhr Valley. There are big cities such as Cologne and Dortmund struggling with the economic downturn and the crumbling of multicultural communities, great swaths of farmland and also pockets of neglect, as impoverished as anything that can be seen in the heavily subsidised eastern Germany. Eighteen million people live in the region compared with only eleven million in the whole of Greece. It is ruled by a coalition of Christian Democrats and Free Democrats, just like the country as a whole.

The election has become a tight contest. If the Government collapses there, Angela Merkel will lose her majority in the Upper House of parliament — and the plans for a radical overhaul of the tax and health systems will be blocked by the Social Democrats. Popular frustration about Greece, and about Europe, has therefore become a critical factor in Ms Merkel’s future. >>> Roger Boyes | Saturday, May 08, 2010

Zeal and Angst: Germany Torn Over Role in Europe
Helmut Kohl, left, returns to the European stage. Photograph: The Wall Street Journal
THE WALL STREET JOURNAL: LUDWIGSHAFEN, Germany—Helmut Kohl, frail and confined to a wheelchair, returned to public view this week, imploring his countrymen not to abandon the goal he spent his political life pursuing: a united Europe.

"Today, I am convinced more than ever that European unification is a question of war and peace for Europe and for us, and the euro is part of our guarantee of peace," the former chancellor, his voice uneven and raspy, told guests at a celebration for his 80th birthday.

As Chancellor Angela Merkel looked on, Mr. Kohl issued a thinly veiled critique of her reluctance to help Greece, saying he couldn't understand "people who act as if Greece doesn't matter." Of course the situation is difficult, but Germany must pull out all the stops, he said, drawing applause from the crowd.

The scene underscored the threat Greece's turmoil poses to monetary union, the grandest expression of the European continent's drive toward integration. Mr. Kohl led the unification drive two decades ago. Now the increasingly disruptive debt problems in Greece and elsewhere post the question: What price is Germany willing to pay to save Europe? >>> Marcus Walker and Matthew Karnitschnig | Saturday, May 08, 2010

Eurozone Talks Battle to Stem Global Crisis Over Greek Rescue Plan
THE GUARDIAN: Turmoil in international markets hangs over emergency summit of European leaders

European leaders are battling a crisis of confidence in the euro single currency tonight, desperately seeking a formula to reassure the markets as the emergency triggered by Greece's huge debt levels and Europe's response threatened to go global.

An emergency summit of the 16 leaders of the countries using the single currency was held in Brussels, with chancellor Angela Merkel of Germany and president Nicolas Sarkozy of France demanding tougher and quicker regulation of the financial markets in what looked like a doomed attempt to contain contagion from the Greek drama.

With the pace of developments outstripping the ability of political leaders to respond, what was initially called as a summit to bless a €110bn (£95bn) rescue package for Greece turned into a frantic exercise in global crisis management.

Alarm bells were ringing in major capitals across the world where leaders voiced their exasperation with European attempts to contain the fallout from Greece. In what may have been Alistair Darling's last part in trying to manage international financial turbulence, the chancellor took part in a phone conference of G-7 finance ministers discussing the implications for the international bond markets of the Greek debt debacle.

Australia's prime minister, Kevin Rudd, was scathing about the EU package for Greece over three years agreed last weekend by 15 eurozone countries and the International Monetary Fund: "Markets have judged those arrangements to be inadequate," he [said]. >>> Ian Traynor, Brussels | Friday, May 07, 2010

Greece Fuels Fears of Contagion in U.S. : Crisis Would Likely Spread in Europe Before Crossing Atlantic, Economists Say; Wary Investors Monitor Credit Markets
THE WALL STREET JOURNAL: Investors and policymakers are starting to worry that the economic crisis in Greece could cross the Atlantic and undermine the U.S. economic recovery, in the same way that U.S. housing woes in 2008 battered Europe.

"What we have seen is that contagion"—economist-speak for a spreading crisis—"has gone global," says Harvard University economist Jeffrey Frankel.

Early credit-market indicators of contagion to the U.S. aren't yet flashing red, but investors are keeping a wary eye on them. "This is like we've agitated a colony of prairie dogs, and everybody is looking out of their hole to see what's going on," said Howard Simons, bond strategist at Bianco Research in Chicago. "But it's no crisis, yet." >>> Bob Davis and Mark Gongloff | Wednesday, May 05, 2010

Greece on Brink of Abyss as Three Bank Workers Killed in Riots
A riot policeman falls after being hit by a molotov cocktail near the Greek parliament in Athens. Photograph: Times Online
TIMES ONLINE: The President of Greece warned last night that his country stood on the brink of the abyss after three people were killed when an anti-government mob set fire to the Athens bank where they worked.

“I have difficulty in finding the words to express my distress and outrage,” President Papoulias said. “The big challenge we face is to maintain social cohesion and peace. Our country came to the brink of the abyss. It is our collective responsibility to ensure that we don’t step over the edge.”

Violence flared as tens of thousands of striking workers and civil servants took to the streets of the capital and the northern city of Salonika to protest against the Government’s austerity measures.

The demonstrators gathered as George Papandreou, the Prime Minister, was trying to push through parliament tough budget cuts demanded by the European Union and the International Monetary Fund in exchange for a ¤110 billion aid package.

“We are all deeply shocked by the unjust death of three workers, three of our fellow citizens, who were victims of murderous attacks,” he told MPs. >>> Philip Pangalos in Athens | Thursday, May 06, 2010