Is Europe on the verge of triggering another 2008-type meltdown?
European Central Bank chief calls euro zone ‘unsustainable,’ criticizes Spanish bank response
By Howard Schneider, WashPost, Published: May 31
U.S. and European officials, who just weeks ago seemed to be getting a handle on the euro zone’s financial crisis, are now scrambling to prevent a new round of problems from pulling down some of Europe’s largest economies.
European Central Bank President Mario Draghi warned in Brussels on Thursday that he considered the euro zone’s current structure “unsustainable,” and said the region’s governments must surrender far more budget and regulatory power to a central authority if the currency union is to be saved.
His comments — and an intense week of high-level lobbying by U.S. officials — come amid a worldwide swoon on stock markets, a flight by investors to the safe haven of U.S. and German bonds, and a growing concern that problems in Spain’s banking sector may force the euro zone’s fourth-largest economy to seek a costly bailout. Major U.S. stock market indexes were down 6 percent in May and the euro is trading near a two-year low against the dollar.
A top U.S. Treasury official traveled to Europe this week to press leaders for faster action. And President Obama conferred with European leaders by phone this week about how to contain a two-year-old crisis that may be reaching a dangerous denouement.
(More here.)
U.S. and European officials, who just weeks ago seemed to be getting a handle on the euro zone’s financial crisis, are now scrambling to prevent a new round of problems from pulling down some of Europe’s largest economies.
European Central Bank President Mario Draghi warned in Brussels on Thursday that he considered the euro zone’s current structure “unsustainable,” and said the region’s governments must surrender far more budget and regulatory power to a central authority if the currency union is to be saved.
His comments — and an intense week of high-level lobbying by U.S. officials — come amid a worldwide swoon on stock markets, a flight by investors to the safe haven of U.S. and German bonds, and a growing concern that problems in Spain’s banking sector may force the euro zone’s fourth-largest economy to seek a costly bailout. Major U.S. stock market indexes were down 6 percent in May and the euro is trading near a two-year low against the dollar.
A top U.S. Treasury official traveled to Europe this week to press leaders for faster action. And President Obama conferred with European leaders by phone this week about how to contain a two-year-old crisis that may be reaching a dangerous denouement.
(More here.)
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