financial crisis - France - Merkel - Sarkozy

Merkel, Sarkozy pledge coordination on financial crisis

Saturday 11 October 2008

Stressing the need for a unified European financial package during a press conference with German Chancellor Angela Merkel, French President Nicolas Sarkozy said he would meet with British PM Gordon Brown ahead of Saturday's eurozone talks.

Saturday 11 October 2008

By AFP (text) / A. Georgian (video analysis)

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French President Nicolas Sarkozy and German Chancellor Angela Merkel vowed Saturday they would work together, as Europe sought a joint response to the financial crisis.

The leaders of the 15 eurozone economies and Britain's Prime Minister Gordon Brown were due in Paris on Sunday for talks and the continent appeared to be leaning towards a British-style plan of partial bank nationalisation.

Ahead of Sunday's summit, Sarkozy met Merkel in Colombey-les-Deux-Eglises, home village and final resting place of General Charles de Gaulle, in a bid to coordinate the positions of the eurozone's two largest economies.

"All decisions, all preparations and all analyses, we're making together," Sarkozy insisted, denying reports that he had ever proposed setting up a joint European bank bail-out fund, an idea rejected by Merkel's Germany.

"We are analysing the crisis together. Germany and France have perfectly identical views on the consequences to take from that for the short, medium and long term," the French leader said.

Merkel agreed Paris and Berlin were "on the same path as regards putting in place a concerted and coherent reaction for the eurozone" but noted that within this there was "naturally room for manoeuvre for each member state".

The pair said they expected to make more concrete announcements about economic measures to contain the effects of the credit crunch and the week's stock market freefall on Sunday after the summit.

As the European leaders met in France, the finance ministers of the world's Group of Seven industrial powers were in the United States to discuss a global response.

After G7 talks in Washington on Friday , US Treasury Secretary Henry Paulson said his government was ready to invest directly in banks for the first time since the Great Depression in a bid to restore confidence.

This move followed the decision by Britain's Brown to guarantee inter-bank lending and to offer to take stakes in some of the country's biggest banks in a programme of partial nationalisation.

Europe now seems likely to follow London down this route, which bankers hope will restore confidence and restart the frozen inter-bank lending market.

France's finance minister, Christine Lagarde, said French banks were relatively well positioned and would probably not need the government to buy their stocks, but other European economies might follow the British example.

"It's very likely, because European banks are also under-capitalised," she said in an interview with France Info radio on Saturday.

"We have seen Great Britain, which is outside the eurozone, make propositions in this area," she added. "We'll have to see about that in the eurozone, but I suppose it's one of the options."

On Friday, the German daily Die Welt reported that Germany was working on a British-style plan, and a senior European offical told AFP that Brown's idea was a "good one" and would be discussed by the eurozone 15.

"It would be smart to follow the British example at the European level," he said, speaking on condition of anonymity so as not to pre-empt the summit.

"I spoke to Madame Merkel and I think she's open to a European decision."

Under the British programme, unveiled on Wednesday, 50 billion pounds (64 billion euros, 87 billion dollars) of taxpayers' money has been made available to buy shares in the country's banks.

Britain is not a member of the eurozone, but Sarkozy sid he would meet Brown separately at the Elysee Palace just two hours before the main summit in order to "maximise the chances" of full European cooperation.

Before their talks Merkel and Sarkozy inaugurated a memorial to De Gaulle in Colombey-les-deux-Eglises, the village east of Paris that hosted the famous summit between the general and Chancellor Konrad Adenauer 50 years earlier.

On Sunday, Merkel and Sarkozy and their 13 colleagues from the other members of the single-currency bloc will hold a crisis summit in Paris.

Some of the eurozone leaders were annoyed at being locked out of last week's talks, and Spain's Prime Minister Jose Luis Rodriguez Zapatero had called for a full meeting of members on Friday when he visited Sarkozy.

financial crisis - France - Merkel - Sarkozy

[4] reactions :

12/10/2008 22:55:02 Alert a moderator

The steps and each one at a time

By Simon Mohammed - USA

Baill out the bank or financial institution to unfreze the interbanking is one, the recapitalization or restruction of assets and liabilities etc is a good step. But remember that like the GL for the bank, the nation themself are gl, and the street, the tax payer the population desrve no thing less then the same approch.

we they every one need to be responsible and to not puch it on people and their kids and future kids, this will not be a healthy market, what broguht us here is the one side of the problem resolution and not all of it.

Look at the poor country in africa and else where, we should look at them the same.

if those vision are not extended the same way there will be always problem.

and please do not borrow from us the people to go for war and then we max then you interborrow for more ward and then we pay.

this is what you, me we all need to understand.

Recapitalization and restructuration for all the second step the people and poor country.

other wise it will be the same like since 1900 and it will lead to no where.

the 21 st world supposed to be globaly sivilized and moderation in gain, in expenses in ambition and no wars no wars who ever is claiming to resolve the issues even in the USA by dilike one war and like a new one i don't trust him.

thank you so very much
12/10/2008 22:29:39 Alert a moderator

Taxpayers money becomes investment, any tax cuts please???

By Konstantinos Kardiasmenos - Athens, Greece

I sincerely dont care about your national fights btween the frogs and the roast beefs. Currently what happens is a massive move from what I learned in the university as the free economy of neoliberalism and monetarism to a hybid of socialist capitalism. I agree that the plan needed to pass in order to save a ready to die patient i.e the world economy. The cost of all these plans will be carried by the taxpayers of the relevent countries who will be asked to pay their taxes in order for the money to land n the balance sheets of the very same institutions they bought expensive money from to get their homes, cars and electrical appliances. There is a fundamental chance here for some statesmen to rise and win indefinate reelections and win their place in the pantheon of world history. That is the following: since taxpayers become shareholders and money lenders for the first time in history, the banks which will become partly nationalised or totally nationalised will pay back dividents and capital returns BACK TO THEIR LENDERS I.E THE TAXPAYERS. If that is not feasible, then governments will have to get all that money and move forward to brave tax cuts to the little guys who will bear the huge burden of this Societe Anonyme Saving Plan. The latter will in its turn boost disposable income and consumption and of course inflatoin. However, inflation should not be the enemy at this time since the money circulation will not be augmented via money printing but due to genuine economy overheating. Furthermore, since banks and their lending will be controlled by the state, overheating will be eased by interest rate hikes and then at that point the governments will be free to reestablish a normal capitalist system, where THE RULES WILL HAVE TO BE THERE THE SAME FOR EVERYONE.
GOD BLESS EUROPE
12/10/2008 14:41:07 Alert a moderator

Anglosaxon capitalism

By Johannes Kramer - Brussels

As continental Europeans, we are punished because of the rogue capitalism developed by Anglosaxon banksters. I think we should crush that system, and kick the UK out of the EU. There's no place for this mad type of deregulated capitalism ever again.

The UK and the USA should move to Antarctica and have fun there with their virtual speculative money making. They should leave humanity alone. Their system is totally fake. It's built on air. Bad air.
11/10/2008 22:21:12 Alert a moderator

Merkel, Sarkosy pledge coordination on financial crisis.

By Matthew Spencer - England/Bedford

The prevailing sentiment seems to be: Gordon Brown has proposed the only form of action that stands the slightest chance of working, but he is British and some French ministers would sooner die than follow a British lead. It's also the most positive direct input which Great Britain has had on American policy-making since late August, 1814, which is probably causing severe indigestion at the State Department, which throughout both world wars, the cold war and the war on Terrorism, still appeared to be fighting the war of 1812.

As for who should be blamed for the crisis in the first place: all the dodgy things which the bankers have done, have been done in order to try and create enough money to buy all the buildings which the property developers and planners wanted to throw up, in America, Britain and Spain. It would be an injustice to pillory bankers and let the developers and their political stooges, such as Tony Blair, off scot free.