Friday, February 12, 2010

International Gatherings

International Gatherings:

G7 Finance Ministers and EU Summit
· The G7 Finance Ministers met in Canada last weekend - the Sat communiqué didn’t
reveal anything too earth shattering. The ministers pledged to maintain stimulus
spending and insure an economic recovery while European officials sought to reassure
world markets about certain sovereigns, like Greece. Officials emphasized that any
solution to the Eurozone sovereign debt issues would be handled by a “European”
solution, meaning they want nothing to do w/the IMF (at least for now). French Finance
Minister Christine Lagarde said on the sidelines of the G7 Conf that the strengthening
U.S. dollar against the euro could be a positive development for the European economy.
"We always complained about the dollar not being strong enough," Lagarde said. "That is
clearly an improvement."

· EU Summit on Thurs – the statement promised to provide aid but no specific
mechanism of assistance was articulated. EU’s Barroso said the leaders didn’t discuss
financial pledges for Greece and Van Rompuy indicated that there were no talks about
the debt situation in other Eurozone states. The Bottom Line was that the European
leaders pledged support for Greece should the situation reach a crisis but since conditions
aren’t there yet, no action was required at the moment. "Euro-area member states will
take determined and coordinated action if needed to safeguard financial stability in the
euro area as a whole”. The market remains on edge about Greece and its not clear
whether all the major European countries have worked out their differences. The
Guardian reported Thurs night that "Germany is stepping totally on the brakes on
financial assistance….On legal grounds, on constitutional grounds and on
principle….They're not waving their chequebooks." Berlin and Paris have been at odds
for the last week through several rounds of negotiations, with the French, backed by the
Spanish, seeking a solution through lending to Greece. But Germany and the European
Central Bank (ECB) took a hard line (The Guardian).

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