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International | Global Justice and Anti-CapitalismEuropean leaders fail to agree on a common strategy for the financial crisis
Monday, October 6, 2008 :Following the most turbulent week in European financial markets since the 1930s, a group of European leaders met in Paris on Saturday to discuss measures to prevent a collapse of the European banking system. The heads of state of France, Germany, Italy and Britain, along with European Central Bank chief Jean-Claude Trichet, European Union (EU) Commission President José Manuel Barroso and Luxembourg Prime Minister Jean-Claude Juncker (also head of the Euro group of finance ministers), met in emergency session.
In the course of the Paris summit much criticism was made of the US as the source of the banking and finance crisis, but the assembled European leaders were unable to present any viable coordinated strategy to abate the growing financial storm engulfing European banks. The only concrete proposal to emerge from the meeting was the establishment of a 15 billion euros fund to help small businessmen. Vague resolutions were adopted for a relaxation of European financial targets and new regulations to rein in the excesses of speculators, and an appeal was issued for a global summit to discuss the crisis. Plans proposed last week for a European bailout fund failed to appear on the summits agenda. French President Nicolas Sarkozy called the meeting on Saturday, at short notice, following the collapse of a series of large European banks. Just over a week ago, European governments and private banks bailed out no less than five major banksGermanys Hypo Real Estate, Britains Bradford & Bingley, the Dutch-Belgian Fortis group, the Belgian Dexia bank and one of Icelands biggest banks. Read More
Irish government organises massive support package for banks
Monday, October 6, 2008 :The Irish government announced on September 30 a plan to guarantee all deposits in the countrys six major domestic financial institutions, a move whose cost could approach the sum the US will make available to bail out Wall Street.
The potential total cost of the proposal will amount to 420 billion, around five times Irelands GDP, and the taxpayer will have to foot the bill. The announcement came on the back of a number of banks collapsing across EuropeBradford and Bingley in Britain, Hypo Real Estate in Germany and Fortis in Belgium, to mention only the most prominent. The impact of the turmoil in Europe had been felt particularly on the Irish stock market, with shares plummeting on September 29. Anglo Irish Bank, one of the largest financial institutions, was down 46 percent, while Bank of Ireland and the Allied Irish bank also suffered double digit decreases. The threat of an Irish bank being the next to go under had the government taken no action was very real. Announcing the decision to guarantee all deposits, the government stated that it has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank,) covered bonds, senior debt and dated subordinated debt (lower tier II,) with the following banks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society ... It has done so following advice from the Governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish Banking system. Read More |