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发帖数: 1972 | 1 Reuters) - France and Germany, Europe's two central powers, clashed on
Wednesday over whether the European Central Bank should intervene more
forcefully to halt the euro zone's accelerating debt crisis after modest
bond purchases failed to stop the rout.
Facing rising borrowing costs as its 'AAA' credit rating comes under threat,
France appeared to plead for stronger ECB action, adding to mounting global
pressure spelled out by U.S. President Barack Obama.
Bond market contagion is spreading across Europe. Italian 10-year bond
yields have risen above 7 percent, unaffordable in the long term. Yields on
bonds issued by France, the Netherlands and Austria -- which along with
Germany form the core of the euro zone -- have also climbed.
"The ECB's role is to ensure the stability of the euro, but also the
financial stability of Europe. We trust that the ECB will take the necessary
measures to ensure financial stability in Europe," government spokeswoman
Valerie Pecresse said after a cabinet meeting in Paris.
Pecresse said Paris believed the risk premium investors charge to hold
French debt rather than safe haven 10-year German Bunds "is not justified".
That "spread" hit a euro era peak of 195 basis points on Wednesday.
But German Chancellor Angela Merkel made clear Berlin would resist pressure
for the central bank to take a bigger role in resolving the debt crisis,
saying European Union rules prohibited such action.
"The way we see the treaties, the ECB doesn't have the possibility of
solving these problems," she said after talks with visiting Irish Prime
Minister Enda Kenny.
The only way to recover markets' confidence was to implement agreed economic
reforms and build a closer European political union by changing the EU
treaty, Merkel said.
ECB policymakers continue to reject international calls to intervene
decisively as Europe's lender of last resort, stressing it is up to
governments to resolve the debt crisis through austerity measures and
reforms.
SHORT-LIVED RESPITE
Traders said the central bank bought Spanish and Italian bonds on Wednesday,
but the respite was short-lived and there was no sign of a change in its
policy of limited, stop-go purchases to calm markets temporarily while
maintaining pressure on governments.
Wall Street opened lower and European shares slipped as investors doubted
the ability of governments in the euro zone to contain the crisis.
Obama, on a visit to Australia, turned up the heat on Europe to act more
boldly to extinguish the spreading bushfire.
"Until we put in place a concrete plan and structure that sends a clear
signal to the markets that Europe is standing behind the euro and will do
what it takes, we are going to continue to see the kinds of market turmoil
we saw," he said.
Obama said that whilst there had been progress in putting together unity
governments in Italy and Greece, Europe still faced a "problem of political
will".
In Rome, Prime Minister-designate Mario Monti unveiled a government of
technocrats, taking the key economy portfolio for himself in a drive to
implement long delayed structural economic reforms and austerity measures.
Monti, a former European Commissioner, said he hoped markets would be
reassured by his team, which features several academics and Intesa bank
Chief Executive Corrado Passera, but no politicians. He will present his
austerity programme to the Senate on Thursday.
Officials said the new 16-member government, including three women and
announced by Monti at the presidential palace in Rome, would be sworn in at
5 p.m. (1600 GMT).
Federico Ghizzoni, chief of Unicredit, said he would ask the ECB to increase
access to central bank funds for Italian banks, which have faced growing
funding problems since Italy was sucked into the debt crisis in July.
SYSTEMIC CRISIS
European Commission President Jose Manuel Barroso told the European
Parliament the euro zone faced a systemic crisis and fragmenting the
European Union was no solution.
In Greece, technocrat Prime Minister Lucas Papademos, a former ECB vice-
president, was set to win a big confidence vote in parliament for his
interim government despite the refusal of the main conservative leader to
sign up to more austerity.
New Democracy party chief Antonis Samaras gave Papademos only arms-length
backing, refusing to bow to EU demands for a written commitment to the
bailout programme and calling for elections in three months to restore
social peace.
With Papademos' national unity coalition already split, rebuilding Greece's
shattered finances to avert default will be a daunting task as Europe
battles to prevent its debt woes from dragging down the world economy.
Financial markets are sceptical that unelected technocrats will have the
political clout to impose unpopular reforms, the two-year-old debt crisis
risks engulfing the entire currency bloc and hurting global growth.
And there are growing signs of strain in the money market, the plumbing of
the international financial system.
Banks in the euro zone face increasing difficulties in obtaining dollar
funding, and while the stresses are nowhere near as acute as they were in
the 2008 financial crisis, they have continued to mount despite ECB moves to
provide unlimited liquidity to banks.
"Markets are clearly expecting a circuit breaker to alleviate pressure on
periphery bond yields," said David Scutt, a trader at Arab Bank Australia in
Sydney. "If no announcement is forthcoming in the days ahead, one suspects
that the situation could unravel fairly quickly."
With a Brussels-based think-tank warning that France's economy should be "
ringing alarm bells", Finance Minister Francois Baroin sought to calm fears
about public finances.
"We are expecting a slowdown, but not a recession," Baroin told LCI news
channel. "We are doing everything to maintain our credit rating, to borrow
more cheaply."
Data on Tuesday showed the economy of the 17-nation euro zone barely grew in
the third quarter. ECB President Mario Draghi has predicted the currency
bloc will be in a mild recession by the end of the year.
Many analysts believe the only way to stem the contagion for now is for the
ECB to buy large amounts of bonds -- effectively the sort of quantitative
easing undertaken by the U.S. and British central banks.
The ECB has bought 187 billion euros in government bonds since May 2010 but
it has so far "sterilised" all purchases by taking the equivalent amount in
from the market in deposits. One option would be to stop fully sterilising
bond purchases.
This has been anathema in Germany, which fears that printing money could
stoke inflation.
But on Tuesday Peter Bofinger, a member of the group of economists that
advises the German government, said the ECB should indeed become the euro
zone's lender of last resort if the bloc's debt woes risked tearing apart
the financial system.
"If politics can't do it, then the ECB must do all it can to bring interest
rates down to more reasonable levels," Bofinger said at Euro Finance Week.
($1 = 0.734 Euros)
(Additional reporting by Emelia Sithole-Matarise in London, Gareth Jones and
Dina Kyriakidou in Athens, Deepa Babington in Rome; writing by Paul Taylor;
editing by Janet | d******4
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