EuroCrisis Update, Greece, Merkel, Portugal
Euro zone leader Jean-Claude Juncker hailed the launch of the 500 billion euro (HK$5.02 trillion) debt rescue firewall as “an historic milestone.’’But the message fell on deaf ears. Junker and others have talked up so many bailouts no one is listen anymore.
The entry into service of the European Stability Mechanism, chaired by Juncker, “marks an historic milestone in shaping the future of monetary union,’’ the Luxembourg Prime Minister said today after the inaugural meeting of the Eurogroup of finance ministers in Luxembourg. In reality is just more of the same Euro printing circus and market manipulation.
He added that the “the euro area now is equipped with a permanent and effective firewall, which of course is a crucial component in our strategy to ensure financial stability in the euro zone.”
Klaus Regling, who heads the European Financial Stability Facility announced the firewall is fully operational as he opened the press conference.
The ESM is one of the key elements in the euro zone’s defenses against a debilitating debt crisis.
Portuguese President Anibal Cavaco Silva criticized the European Central Bank for being slow to react to the euro zone debt crisis, in an interview today.
The ECB revealed last month that it was now ready to drive down the borrowing costs of debt-wracked countries by buying their sovereign bonds on the secondary market under strict conditions, AFP reports.
The announcement sparked a rally on debt markets but came only after months of doubt over how the euro zone would help struggling countries such as Spain which has the fourth-biggest economy in the single currency region.
“The European institutions, including the ECB, have a tendency to arrive late,” Silva complained in an interview with Spanish business daily Expansion.
The central bank for the 17 euro zone states “acted very late’’ to ease market tensions, Silva added. “The delay in the intervention created enormous speculation in the media and public opinion.”
The Portuguese head of state said it was “absurd’’ that some euro zone members such as Germany were able to borrow on the markets at negative rates while others had to pay more than six percent.
“I have been saying for more than a year that the central bank of a monetary union should be the lender of last resort, and that the ECB ought to be ready to buy unlimited amounts of sovereign debt on the secondary markets,” Silva said.
“In exchange, the countries that are helped must carry out policies leading to stability in their public finances,” he added.
“But, above all, the ECB’s mission should be to guarantee the irreversible nature of the euro.”
Silva’s comments were released as euro zone finance ministers gathered in Luxembourg to launch a new weapon against financial crises, the European Stability Mechanism bailout fund.
Greek police are on high alert for tomorrow’s visit by German Chancellor Angela Merkel, bracing for street protests against the leader of Europe’s paymaster who has become a hate figure to many.
About 6,500 police, backed by water cannon and a helicopter, will be on the streets for her trip alongside about 300 members of the coastguard, and Athens city center will be sealed off, a police source said, AFP reports.
The police declared a ban on “public gatherings and demonstrations” in a broad section of the city centere that includes the German embassy, parliament and the offices of government but union gatherings lie outside this area and will be held as planned.
“Syndicates and all of society will give a dynamic response to the plans of Merkel and European powers that are imposed by creditors and implemented by the government,” the main Greek unions said in a statement.
Merkel will meet conservative Prime Minister Antonis Samaras in Athens on her first visit to the debt-crippled country since the beginning of the Greek financial crisis almost three years ago.
“We believe this is a message of faith in the course of the Greek government, the Greek economy,” government spokesman Simos Kedikoglou told Antenna television.
“It is a positive step, it’s important that the German chancellor is coming to Greece for the first time since the start of the crisis,” he said.
Merkel’s office said she was bringing a message of support for “ambitious’’ cuts already in place in Athens and encouragement to maintain the efforts.
The German leader is a popular hate figure in Greece, often blamed for harsh austerity measures imposed by the government in return for vital international aid, and has in the past been depicted as Adolf Hitler in tabloid caricatures.
Last month, during a general strike against spending cuts, protesters marching past the Bank of Greece crossed out ‘Greece’ on the bank’s sign and wrote ‘Merkel’ over it.
During the visit, special security precautions will also be taken for the German embassy and other German-affiliated buildings, the Athens News Agency reported.
Samaras has assured Merkel that she will be “welcomed in the appropriate way for the leader of a major power and a friendly country’’, but many in Greece object to the visit.
Opposition parties, labor unions and communist-affiliated group Pame are planning to greet the German leader with street protests and work stoppages.
“[Merkel] is coming to rescue a corrupt and discredited political system that is subject to her interests,” said Alexis Tsipras, leader of radical leftwing opposition party Syriza that is taking a leading role in the protests.
Leader of popular nationalist party Independent Greeks, Panos Kammenos, has also called for a gathering outside the German embassy.
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