EU fighting for survival, says Van Rompuy
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European stock markets fell on Monday morning ahead of a key meeting between Eurozone finance ministers. Stock exchanges in London and Paris lost more than one per cent, although the euro currency remained stable. Finance ministers are meeting to discuss the worsening debt crises in Ireland and Portugal.
“We all have to work together in order to survive with the eurozone, because if we don’t survive with the eurozone we will not survive with the European Union,” Herman Van Rompuy, EU president, said in a speech.
Van Rompuy said he was “confident” the EU would beat the crisis thanks to “courageous” measures taken by states to reduce expenditure at a time of “populism, despite massive protests on the street and knowing they risk electoral defeat”.
They have lent money to which there are no assets and the scale of the requirements from the public purse for the Irish taxpayers to make that good is just huge.
Q&A - Graham Bishop, financial analyst
The meeting is likely to focus on a possible bailout for Ireland, which is under increasing pressure, and Portugal which is at high risk of needing financial support.
"The Irish are very reluctant to take the aid because it will be seen as a national humiliation," Graham Bishop, independent financial analyst, told RFI.
"They don’t feel as if they did anything wrong in terms of the way that they ran their fiscal policy. It’s just the Irish banking system which has let them down rather badly," added Bishop, a European financial specialist.
At midday GMT London’s stock exchange was down by 1.52 per cent, Paris’s CAC was down by 1.67 per cent and Frankfurt was down 0.86 per cent. The euro remained stable in foreign exchange deals at 1.357 dollars, compared to 1.358 dollars late on Monday in New York.
"The core of the euro is France and Germany," said Bishop. "The idea that they would abandon the euro is tantamount to abandoning the European Union," he added.
In Greece on Tuesday the government raised 390 million euros in the sale of three-month treasury bonds. The yield was up 0.35 per cent on a month earlier as investors demanded greater returns on their investment.
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