August 25, 2012 / MariaNews.com 

Spain begins talks on economic bailout

By Catholic Online

LOS ANGELES, CA (Catholic Online) – Fellow European nation Greece is seeking to slow the pace of its austerity program after it took two bailouts from the eurozone and the International Monetary Fund.

World leaders have reportedly done a deal behind the scenes to prevent Greece slipping out of the single currency before the U.S. presidential elections in November.

President Obama is seeking re-election in November and the Treasury believes that the White House will put pressure on Germany, France and other EU power brokers to prevent a Greek exit before then in order to prevent economic turmoil from muddying his chances.

“President Obama would bring a pretty large amount of pressure to bear on Germany if they tried to go before the elections,” a senior government source says. Treasury officials don’t think the crisis will be solved before the German elections in September 2013, therefore condemning the global community to another year of financial instability.

German Chancellor Angela Merkel has resisted calls to back “Eurobonds” that would allow wealthy countries such as Germany underwrite the debts of the likes of Greece and other stressed nations.

British officials believe Chancellor Merkel will be forced to create a grand coalition with the German opposition Social Democrats after the next election. Proposed plans for eurobonds could then be pushed through as the policy of a government of national unity.

Leader of the socialist SPD Sigmar Gabriel had previously said that his party was prepared to accept collective debt liability if Germany is granted stricter budgetary oversight of Greece.

Revelations that the Spanish may need a sovereign debt bailout has sent chills through the Treasury.

Chancellor George Osborne privately believes that the countries in the single currency have not yet done enough to put a firewall in place to prevent contagion spreading through Europe if a country like Greece leaves the euro.

The most salient fear is that a Greek exit would lead to a run on financial markets against Spain and Italy, whose economies are large enough to send Europe into a spiraling depression.

© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.

MariaNews.com stumbled across the article below which describes how China and the EU are “negotiating” to decide the future of the global economy..   WHAT!    Does anyone else have a problem with China dictating the future of the global economy?   Post a comment or send us an email at news@marianews.com and tell us what you think.

Here is the story.

Beijing (AsiaNews / Agencies) – Optimistic and purposeful declarations, but nothing concrete, from yesterday’s meeting in Beijing between Klaus Regling, head of the European Financial Stability Facility (EFSF), with Chinese financial authorities. The two sides are trying to take full advantage of negotiations and reciprocal concessions that everyone expects, but any delay in decisions could depress stock markets.

Zhu Guangyao, Chinese Vice-Minister for Finance, said after the meeting that China needs more time to study the details of the EFSF program “before deciding on investment.” A legitimate request, since the “rescue” program was announced on October 27 after a night of negotiations and that Regling had announced that the arrangements for the purchase and management of EFSF securities have yet to be defined. One of the two solutions agreed to upgrade ‘ EFSF provides a new special fund open to investment from emerging economies and the IMF to buy bonds on secondary markets. But many hoped that Beijing would at least release a statement of willingness to finance the program. Instead, China has taken its time and Zhu also added that the purchase of European EFSF titles “should be” among the topics of the next G20 summit in France.

A signification stance, given that Cui Tiankai, Deputy Foreign Minister, said that the G20 should talk about stability of financial markets and the foreign debt crisis, the very problems that the EU wants to deal with the EFSF . Beijing appears to want to highlight Europe’s inability to solve the current problems by itself, to get the international recognition that for aid to these levels there must be adequate compensation, for example, with “a greater influence of emerging economies” in the IMF, as Cui also mentioned.

Read More: http://www.asianews.it/news-en/China-and-EU-begin-negotiations,-to-outline-world’s-economic-future-23048.html