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Merkel Slams Euro Speculation, Warns of ?Resentment? (Update1) - BusinessWeek
Esto cada vez se parece más a los años 30.
Merkel Slams Euro Speculation, Warns of ?Resentment? (Update1) - BusinessWeek
Goldman la ha cagado, se han canteado demasiado y ahora están marcados. Buena excusa para empezar a introducir el inevitable proteccionismo, esta vez empezando por el sejtor financiero.Feb. 23 (Bloomberg) -- German Chancellor Angela Merkel criticized market speculation against the euro, saying that financial institutions bailed out with public funds are exploiting the budget crisis in Greece and elsewhere.
Merkel, in a speech in Hamburg, said a solution to the Greek crisis is the “core element” in re-establishing confidence in the single currency, and urged euro states to adhere to budget rules as soon as possible. Warning against “stirring up resentment and emotions,” she hit out at currency speculators, who she said are taking advantage of debt piled up by euro-area governments to combat the financial crisis.
“The debt that had to be accumulated, when it’s going badly, is now becoming the object of speculation by precisely those institutions that we saved a year-and-a-half ago,” Merkel said in her speech late yesterday. “That’s very difficult to explain to people in a democracy who should trust us.”
It was Merkel’s second attack within five days on financial institutions in the context of Greece, and came as Handelsblatt newspaper reported that the German government is considering clamping down on hedge funds to curtail speculation against the euro. France meanwhile may tighten rules for credit-default swaps in response to the Greece situation, Finance Minister Christine Lagarde said in Paris.
Euro Working
In her speech, Merkel said the euro served Europe well through the financial crisis, because currency speculation would have been more rampant in an environment with more diverse currencies.
“We’d have to damp currency speculation every three days,” Merkel said.
It is vital for the European Commission, the European Central Bank, allied with the “expertise” of the International Monetary Fund, to come to a consensus on Greek’s budget-reform plan to stave off speculation, she said.
The euro declined 0.18 cents, or 0.14 percent, at 1.3577 to the U.S. dollar as of 1:18 p.m. local time in Frankfurt. The dollar touched $1.3444 on Feb. 19, the highest since May 18.
Merkel’s comments revisited themes she raised in a speech in her home state on Feb. 17, when she criticized those banks “that brought us to the brink of the abyss” and said she’ll press ahead with greater regulation of financial markets. It would be a “scandal” if those same banks were found to have helped Greece obscure its finances, she said. While Merkel didn’t mention Goldman Sachs Group Inc. by name, her comments came as attention turned to Goldman’s role in allowing the Greek government to hide the extent of its deficit.
‘Red Card’
Investment banks such as Goldman should be shown the “red card” if they are found to have helped Greece conceal its financial situation, Gunther Krichbaum, head of the German parliament’s European Union committee, told reporters in Berlin.
“In other words, when it comes to placing bonds in the euro zone, which is what these banks make money from, then it can’t be that these banks are considered,” Krichbaum, a lawmaker with Merkel’s Christian Democratic Union, said today.
Goldman did “nothing inappropriate” when it arranged currency swaps for Greece that reduced the nation’s national debt by 2.37 billion euros ($3.2 billion), Gerald Corrigan, chairman of Goldman Sachs’s regulated bank subsidiary, told a panel of U.K. lawmakers yesterday. The swaps were “in conformity with existing rules and procedures.”
Drawing Lessons
“We can draw some lessons from this crisis,” Lagarde told lawmakers in Paris on Feb. 17, according to the minutes of the closed-door meeting published yesterday. “We should examine the suitability of CDSs” used for sovereign states because their movements have become “disconnected from the underlying” economic situation.
Germany may press for new controls on hedge funds, which have used credit-default swaps to speculate on the creditworthiness of southern European countries, Handelsblatt reported yesterday. Action may include limiting derivatives trading to transactions that serve an “economically sensible hedging purpose,” Handelsblatt cited Finance Minister Wolfgang Schaeuble as saying. The Finance Ministry later said it couldn’t confirm the report.
The cost of insuring Greek government bonds has more than tripled since July amid investor concern about its ability to meet payments. Officials in Athens have committed to reduce the budget gap from 12.7 percent of gross domestic product in 2009 to 8.7 percent by the end of this year.
Merkel, in her Hamburg speech to an event sponsored by the Financial Times Deutschland, said the best way to guarantee the stability of the euro is to return to EU rules that limit budget deficits to 3 percent of GDP. She reiterated her support for the Greek government’s plan to narrow its budget gap.
“The mistakes have to be dealt with at their roots,” Merkel said. “In the case of Greece, we need to do everything to support the Greek government, which of course has taken this path, in formulating a true consolidation program.”
Esto cada vez se parece más a los años 30.
