Things may get even worse before they get much better in the European economic 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 warned that without added financial discipline, Europe will descend into a financial chasm.
A few banking system worries
The euro currency has deflated to a two-year low against the United States dollar due to concerns that Greece may not survive and Spain's banking system could collapse. Austrian and French bonds have 10-year yields at their low since the introduction of the euro, but European speculators are putting cash in nonetheless.
Spanish banks moved enormous amounts of cash abroad in March at a rate faster than has been recorded since record-keeping of such transactions started in 1990, notes the Associated Press. The country's fourth-largest lender, Bankia, reportedly was nationalized in May due to huge losses following a real estate crash. As much as $82 billion in net capital has been lost by Spanish banks in recent months.
Bailout plan denied
International Monetary Fund Managing Director Christine Lagarde denied reports that the IMF 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 nation. 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.
Trying to find clarity
The ECB will not write economic policy for the entire euro zone; European leaders have to determine where the nations stand quickly, according to European Central Bank President Mario Draghi.
"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 to 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.
Financers concerned
It is not a good idea to stay cautious at this time, according to Draghi, although financiers are really worried due to the European financial 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.
A few banking system worries
The euro currency has deflated to a two-year low against the United States dollar due to concerns that Greece may not survive and Spain's banking system could collapse. Austrian and French bonds have 10-year yields at their low since the introduction of the euro, but European speculators are putting cash in nonetheless.
Spanish banks moved enormous amounts of cash abroad in March at a rate faster than has been recorded since record-keeping of such transactions started in 1990, notes the Associated Press. The country's fourth-largest lender, Bankia, reportedly was nationalized in May due to huge losses following a real estate crash. As much as $82 billion in net capital has been lost by Spanish banks in recent months.
Bailout plan denied
International Monetary Fund Managing Director Christine Lagarde denied reports that the IMF 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 nation. 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.
Trying to find clarity
The ECB will not write economic policy for the entire euro zone; European leaders have to determine where the nations stand quickly, according to European Central Bank President Mario Draghi.
"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 to 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.
Financers concerned
It is not a good idea to stay cautious at this time, according to Draghi, although financiers are really worried due to the European financial 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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