Things may get worse before they get much better in the European financial crisis, Reuters reports. The European Central Bank is pressuring for a joint guarantee on bank deposits throughout the euro zone, amid fears that bank runs will spread like wildfire as investors head for the hills. Top economic official of the European Commission Olli Rehn cautioned that without added financial discipline, Europe will go down into a financial chasm.
Worrying about the banks
A ton of European speculators are putting cash into Austrian and French bonds that are at a low mark for 10-year yields. The euro has deflated in value against the United States dollar with a two year low at this point because every person is worried. There is a lot of concern that Greece will not survive and that Spain will have a failing banking system.
The Associated Press explained that Spanish banks moved a ton of cash in March faster than it has ever been seen since record keeping began in 1990. The fourth-largest bank, Bankia, lost a lot because of a real estate crash, which brought on it to be nationalized. Spanish banks have lost $82 billion in recent months in capital.
Plan for bailout not confirmed
International Monetary Fund Managing Director Christine Lagarde denied reports that the International Monetary Fund is getting ready for a Spanish bank bailout to keep Europe's economy from sinking further to the mire.
"There is no such plan. We have not received any request to that effect and we are not doing any work in relation to any financial support," said Lagarde.
A referendum in Ireland would make it easier for the European Union to offer aid to Ireland voters, according to the New York Times. There is also an election in Greece on June 17 that will go a long ways towards to euro zone for the country. Right now, the bank bailout favoring New Democracy party is beating the SYRIZA leftists, which is a good thing for people who want bank bailouts.
Finding clarity
European Central Bank President Mario Draghi has made it clear that European leaders must choose where their nations stand in relation to the euro easily, and that the ECB will not write economic policy for the entire euro zone.
"We will avoid bank runs from solvent banks. Depositors' money will be protected if we build this European guaranteed deposit fund. This will assure that depositors will be protected," said Draghi.
Germany is well-known as a paymaster of the European Union and does not like the idea of a joint deposit guarantee for depositors that the ECB is pushing for. It is something German Chancellor Merkel is not sure about. Germany has not been willing to put taxpayer dollars into the union in the past.
"There are integration steps which will require treaty changes. We are not at that stage today but nevertheless there are no taboos," she said at a news conference.
No caution required
It is not a good idea to stay cautious at this time, according to Draghi, although financiers are really worried because of the European economic crisis.
"I urge all governments to keep this in mind, because it is better to err by too much in the very beginning rather than by too little," he said, citing the recent failures of Spain's Bankia and the French-Belgian bank Dexia.
Worrying about the banks
A ton of European speculators are putting cash into Austrian and French bonds that are at a low mark for 10-year yields. The euro has deflated in value against the United States dollar with a two year low at this point because every person is worried. There is a lot of concern that Greece will not survive and that Spain will have a failing banking system.
The Associated Press explained that Spanish banks moved a ton of cash in March faster than it has ever been seen since record keeping began in 1990. The fourth-largest bank, Bankia, lost a lot because of a real estate crash, which brought on it to be nationalized. Spanish banks have lost $82 billion in recent months in capital.
Plan for bailout not confirmed
International Monetary Fund Managing Director Christine Lagarde denied reports that the International Monetary Fund is getting ready for a Spanish bank bailout to keep Europe's economy from sinking further to the mire.
"There is no such plan. We have not received any request to that effect and we are not doing any work in relation to any financial support," said Lagarde.
A referendum in Ireland would make it easier for the European Union to offer aid to Ireland voters, according to the New York Times. There is also an election in Greece on June 17 that will go a long ways towards to euro zone for the country. Right now, the bank bailout favoring New Democracy party is beating the SYRIZA leftists, which is a good thing for people who want bank bailouts.
Finding clarity
European Central Bank President Mario Draghi has made it clear that European leaders must choose where their nations stand in relation to the euro easily, and that the ECB will not write economic policy for the entire euro zone.
"We will avoid bank runs from solvent banks. Depositors' money will be protected if we build this European guaranteed deposit fund. This will assure that depositors will be protected," said Draghi.
Germany is well-known as a paymaster of the European Union and does not like the idea of a joint deposit guarantee for depositors that the ECB is pushing for. It is something German Chancellor Merkel is not sure about. Germany has not been willing to put taxpayer dollars into the union in the past.
"There are integration steps which will require treaty changes. We are not at that stage today but nevertheless there are no taboos," she said at a news conference.
No caution required
It is not a good idea to stay cautious at this time, according to Draghi, although financiers are really worried because of the European economic crisis.
"I urge all governments to keep this in mind, because it is better to err by too much in the very beginning rather than by too little," he said, citing the recent failures of Spain's Bankia and the French-Belgian bank Dexia.
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