Thursday

28th May 2020

Merkel warns euro in 'serious condition'

German Chancellor Angela Merkel on Tuesday (23 November) warned that the euro is in an "exceptionally serious" situation as the European Commission issued a veiled warning to the Irish political class not to topple the government.

"I don't want to paint a dramatic picture, but I just want to say that a year ago we couldn't imagine the debate we had in the spring and the measures we had to take," she said in a speech in Berlin to the Confederation of German Employers, the BDA.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"We are facing an exceptionally serious situation as far as the euro's situation is concerned."

The single currency continued to decline on the back of her statement, falling 1.3 percent to $1.344 by late afternoon, while premiums on bonds in peripheral euro-area states also rose, with Spanish 10-year bonds up 12 percentage points higher, at 4.87 percent and Portugal's up seven percentage points to 6.88 percent.

Meanwhile, EU economy commissioner Olli Rehn issued a veiled warning to Irish opposition politicians not to topple the government.

Speaking to reporters in Strasbourg asking about worries the Fianna Fail-Green government in Dublin could fall, Mr Rehn said: "Stability is important."

"We don't have a position on the domestic democratic politics of Ireland but it is essential that the budget will be adopted in time and we will be able to conclude the negotiations on the EU-IMF programme in time."

"The budget needs to be adopted," he said. "Ireland will pass the budget in the time foreseen and certainly sooner than later."

For his part, the Danish prime minister, Lars Lokke Rasmussen, announced that his government would participate in the eurozone bail-out of Ireland alongside fellow non-euro-using states Sweden and the UK.

Mr Rasmussen said that he had backing from MPs, according to a Bloomberg report.

The move follows on from comments by the Swedish finance minister on Monday, who urged Denmark, as well as non-EU nations Switzerland and Norway should also put their shoulders to the wheel.

"The financial stability of Europe is at risk so it is very important to make a broader effort to try to stabilise the situation," he told the Financial Times.

Norway's finance minister, Sigbjørn Johnsen, responding to the call, said in a statement that it will support Ireland through the International Monetary Fund and hinted that if asked directly, it could come up with additional support.

"Norway will contribute to the financing of the IMF part of the loan package to Ireland through the financing arrangements we already have in place with the IMF, including our bilateral loan agreement with the IMF," he said."

"We have not received any request for additional financial support. If we receive a request from Ireland for a bilateral loan, we will of course consider it."

German court questions bond-buying and EU legal regime

The German Constitutional court ordered the European Central Bank to explain its 2015 bond-buying scheme that helped eurozone stay afloat - otherwise the German Bundesbank will not be allowed to take part.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

EU leaders struggling to break budget deadlock

Cuts to innovation, space, neighbourhood and other programme-spending push down the latest budget proposal on the table of EU leaders. Rebates could stay on, to win the support of the net-payers for a deal.

News in Brief

  1. EU Commission updates working programme for 2020
  2. EU Commission proposes €750bn recovery fund
  3. EU and Japan in favour of WHO reform
  4. Former top diplomat Mogherini takes over EU college
  5. Denmark partly reopens borders to love
  6. France unveils €8bn 'electric' rescue for car industry
  7. Frontex set for Serbia and Montenegro launches
  8. US military: Russia sent jets to Libya to help mercenaries

Coronavirus

ECB promises (almost) whatever it takes

The eurozone's central bank has promised to buy up to €750bn of government and private bonds in new pandemic counter-measures.

Opinion

What does coronavirus 'Black Swan' mean for markets?

Falling demand and prices for oil and raw materials will revive the risk of deflation. The collapse in international trade and long-term rethinking of China's role as the major hub for the production of consumer goods and electronics is inevitable.

Stakeholders' Highlights

  1. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  2. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  3. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  4. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis
  5. UNESDACircularity works, let’s all give it a chance
  6. Nordic Council of MinistersNordic ministers call for post-corona synergies between economic recovery and green transition

Latest News

  1. Mix of loans and grants in Commission €750bn package
  2. EU recovery agreement deal may need 'personal' summit
  3. Little love, as Berlin bids 'auf Wiedersehen' to Trumpism
  4. Future of Europe Conference: Council urged to move now
  5. Lobbyist register to be tightened after Monsanto case
  6. Hawks to doves? Germany's new generation of economists
  7. Is Russia manipulating food supplies during pandemic?
  8. How Kaczyński ruined Poland, judges tell MEPs

Join EUobserver

Support quality EU news

Join us