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27 August 2012

Bloomberg: Germany, France reconnect in a push for crisis solutions


Germany and France agreed to drive ahead measures on closer European integration in a renewed show of unity by the region's two biggest economies to fix the crisis in the eurozone.

German Finance Minister Wolfgang Schäuble, speaking after talks in Berlin with his French counterpart, Pierre Moscovici, said the two countries will create a working group to advance European Union cooperation on banking union, fiscal union and the strengthening of monetary union. They will seek to make common proposals, he said. “We’re having to deal with a phase of weakening growth in the global economy but also in Europe”, Schäuble said. “We want to take joint decisions” to counter that.

The so-called troika of Greece’s international creditors is compiling a progress report that may determine the country’s future in the euro as the European Central Bank fleshes out bond-buying proposals announced by ECB chief Mario Draghi earlier this month. A top German court is meanwhile due to rule on September 12 whether Europe’s permanent bailout fund, the European Stability Mechanism, is constitutional.

Merkel and Hollande agreed last week to await the report from the troika of the ECB, the European Commission and the International Monetary Fund before making a decision on whether to ease the terms of Greece’s $240 billion lifeline. Schäuble said that he and Moscovici talk on the phone once a week and meet in person at least every other week. The working group now being established “is proof just how close our cooperation is”, he said.

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