Global economy on recovery path, risks remain: IMF chief

Reuters– The global economy has stepped back from the brink of danger and signs of stabilization are emerging from the euro zone and the United States, but high debt levels in developed markets and rising oil prices are key risks ahead, the IMF said on Sunday.

“The global economy may be on a path to recovery, but there is not a great Read more of this post


Hungary aid frozen by EU over budget deficit

BBC– The European Union has decided to suspend 495m euros ($655m) of funds due next year to Hungary, because of the country’s budget deficit.

This is the first case of the EU taking action over the budget deficit of any of its members.

But the EU will allow three months for Hungary to pass more budget cuts.

The decision came Spain will have to cut its deficit to 5.3% of GDP this year – higher than the 4.4% that Spain was originally told to target Read more of this post

Bundesbank steps up pressure on Draghi

Financial Time–  Germany’s Bundesbank has stepped up pressure on Mario Draghi, European Central Bank president, to plan the withdrawal of exceptional help for eurozone banks, warning of potentially dangerous side-effects for the region’s financial system.

Jens Weidmann, Bundesbank president, said that ECB governing council members agreed risks taken by the bank must be subject to continuous review. “That does not mean all crisis measures must be immediately withdrawn, but that we as central bankers Read more of this post

Eurozone group backs second Greek bailout

BBC-  The eurozone group has backed Greece’s second bailout of 130 billion euros ($171billion) pending a contribution from the International Monetary Fund (IMF).

Finance ministers from the 17-strong currency bloc had been meeting in Brussels to approve the package.

The meeting followed Greece swapping most of Read more of this post

Euro zone ministers to sign off Greek cash, grill Spain

Reuters– Euro zone finance ministers will sign off on a second bailout for Greece on Monday and shift their focus to Spain, whose government looks set to violate newly agreed EU budget rules by missing its deficit target again this year.

Greece, the bloc’s original problem debtor, swapped its privately held bonds at the weekend for new, longer maturity paper Read more of this post

Finance ministers to revive firewall debate

Financial Times– After helping to push through a Greek debt restructuring that is the largest in history, eurozone governments will revive a debate about boosting firewalls to shield Spain, Portugal and other vulnerable economies from the flames of the crisis.

Finance ministers from the 17-member club are set to discuss the issue at a meeting in Brussels on Monday evening, according to European Union officials, although no decisions are expected.

A leading option under consideration would be to combine the roughly €250bn remaining in the bloc’s temporary Read more of this post

Bank capital calls added to instability, says BIS

Financial Times– Calls by European regulators for banks to hold more capital exacerbated concerns over the health of the eurozone’s financial sector and led to fears of a squeeze in lending to businesses and households, the Bank for International Settlements said on Sunday.

The BIS, often referred to as the central bankers’ bank, said the requirement, announced last October, for the region’s largest banks to buttress their capital buffers and raise their tier one capital ratios to 9 per cent by June of this year had destabilised Read more of this post