This morning’s key headlines from GenerationalDynamics.com.
* China demands a price for bailing out Europe
* Desperate Europeans seek ‘euro bond’ solution
* World Court to decide on WW II Nazi reparations
* Criticism mounts for Turkey’s Erdogan for ‘dangerous macho posturing’
China demands a price for bailing out Europe
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China’s Vice Premier Li Keqiang addressed China-Europe People-to-People Dialogue on Friendship and Cooperation in Beijing on Wednesday, and indicated a willingness to help bail Europe out:
“We have confidence in Europe’s economy and euro, and support some European countries’ efforts to stabilize market, balance budgets and boost structural reform. China will further expand trade and investment with Europe, continue to regard Europe as one of China’s main investment markets, and enhance cooperation with European countries in macroeconomic policy-making, international financial system reform, and global governance.”
In return, however, China is demanding a high price — a demand that the U.S. lift restrictions of high technology products to China, and European recognition of China as a “market economy.” Xinhua and Spiegel
Desperate Europeans seek ‘euro bond’ solution
Moody’s cut the credit ratings on Wednesday of two French banks, Societe Generale and Credit Agricole, because of their exposure to Greece’s debt. Separately, European finance ministers have been warned that Europe is close to a renewed credit crunch and a “systemic” crisis in the euro zone. As Europe’s banking system continues to deteriorate, some leaders are beginning to push hard for a “euro bond” solution. Under this scheme, all 17 eurozone countries would jointly issue and guarantee euro bonds, and individual countries would no longer issue national bonds. The result would be that the northern countries, such as Germany and Finland, would have to pay higher interest rates on their bonds. But the profligate southern countries, currently paying astronomical rates, would pay much lower rates. It seems highly doubtful that the Germans will go along with this, but even the Germans might agree to this out of desperation. Reuters
Some commentary:
“The latest dramatic development is the re-emergence of the banking crisis, which the authorities had hoped to quell through a sustained economic recovery and deliberately misleading stress tests. Both planks of that “strategy” have come unstuck. The rout on the French banking system highlights the need for an urgent recapitalisation — an issue recently raised by Christine Lagarde, and angrily denied by the eurozone’s complacent political leadership. The latest signs are that governments are about to allow the latest stage of the crisis to run out of control. The FT has a story that France continues to resist pressure to recapitalise the banking system, quoting a French official as saying the French equivalent of “crisis, what crisis?” The French banking system, he said, was well capitalised. The problem was Greece, not the French banks. Moody’s will decide on Thursday whether or not to downgrade French banks.”
World Court to decide on WW II Nazi reparations
Italian courts have awarded victims of Nazi war crimes monetary compensation from Germany, and have allowed the seizure of German property in Italy in payment. In 2008, Germany took the case to the United Nations International Court of Justice, claiming that Italian courts have violated German sovereignty by addressing civilian claims for Nazi war crimes. The case, which could have world wide consequences, will be heard this week. Spiegel
Criticism mounts for Turkey’s Erdogan for ‘dangerous macho posturing’
Turkey’s Prime Minister Recep Tayyip Erdogan has become substantially more influential in the Arab world because of aggressive verbal attacks and military threats directed at Israel. However, outside of the Mideast, his statements are being criticized. European leaders are beginning to express alarm at his strident anti-Israel policy and his “macho posturing.” Erdogan is risking a conflict with the West, and appears to have abandoned attempts to join the European Union. Erdogan is also receiving criticism in the Arab world for appear to be abandoning the Syrian people, who are being massacred by the country’s president Bashar al-Assad. Spiegel and Al-Sharq Al-Awsat (London)
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