Friday

8th Dec 2023

Muted market response to EU Greek pledge

Market reactions were mixed on Thursday (11 February) after the EU issued a political pledge to bail out Greece if needed.

Spreads between Greek bonds and the benchmark German Bund narrowed, European shares ended mostly lower, and the euro slid against the dollar in afternoon trading.

Read and decide

Join EUobserver today

Become an expert on Europe

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

... or subscribe as a group

Earlier in the day, EU permanent president Herman Van Rompuy read out a statement on the steps of the Bibliotheque Solvay library in central Brussels after a two hour meeting with an inner core of EU leader policy makers.

"Euro area member states will take determined and co-ordinated action if needed to safeguard financial stability in the euro area as a whole," said the former Belgian prime minister.

With daily proceedings for the 27 leaders originally scheduled to take place at 10am, but later postponed 12 noon, insiders suggested snow had been used as an excuse to free up a morning slot for emergency talks on Greece.

Mr Van Rompuy, European commission chief Jose Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank president Jean-Claude Trichet and Greek Prime Minister George Papandreou met in private to agree the statement's wording, before later presenting it to remaining EU leaders for approval.

But analysts said markets were waiting for clearer details of the bailout plan before reacting. "All they've done is throw verbal political support behind Greek efforts," said Brian Dolan, chief currency strategist at Forex.com, reports AP.

Diplomats also suggested greater details would not be immediately forthcoming as there was still some disagreement over the best way to funnel support towards Athens, with the EU statement making clear the Aegean state had yet to request any aid.

As the largest EU economy, Germany would be expected to stump up the greatest slice of any emergency funding, but Berlin's hand has been restricted by domestic constitutional requirements. Additionally, there is a problem of perception. Countries such as Ireland, which have implemented a series of tough austerity measures, could take issue if Greece were suddenly handed an easier passage.

EU 2020 Strategy

With Greece taking up much of the allotted time, leaders were restricted to under two hours discussion on the EU's 2020 economic strategy over an extended lunch.

Commission president Jose Manuel Barroso achieved broad support for a paper outlining three EU objectives that should be agreed, he said, if Europe is to return to sufficient and sustainable growth.

These include the need to boost research and development in order to step up the bloc's productivity, educational reform to help citizens find jobs, and measures to promote greener growth.

Mr Van Rompuy produced a paper on the governance aspects of the proposed 10-year plan, also calling for a limited number of objectives, which should then be transferred into differentiated national targets.

EU leaders appear to be shying away from the idea of possible sanctions for those member states that fail to live up to their agreed targets, instead moving in the direction of financial rewards for high achievers.

More detailed conclusions on EU objectives are expected at the regular March European summit.

ECB and Greece tussle over extra austerity measures

The European Central Bank wants Greece to implement additional austerity measures to ensure the country's budget deficit declines by the promised four percent this year, but Athens is resisting.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Analysis

Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

EU public procurement reform 'ineffective', find auditors

The EU Commission reformed procurement directives to make bids more attractive (and competitive), but the reform has failed, say auditors. Procedures now take longer, and the number of direct awards and individual tenders has increased over the past decade.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Analysis

Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

Latest News

  1. EU suggests visa-bans on Israeli settlers, following US example
  2. EU ministers prepare for all-night fiscal debate
  3. Spain's Nadia Calviño backed to be EIB's first female chief
  4. Is there hope for the EU and eurozone?
  5. Crunch talks seek breakthrough on EU asylum overhaul
  6. Polish truck protest at Ukraine border disrupts war supplies
  7. 'Green' banks lend most to polluters, reveals ECB
  8. Tense EU-China summit showdown unlikely to bear fruit

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us