Wednesday, June 13, 2012

France Will Propose New Stability Package

France is set to propose a new stability package for the Eurozone. It would have the ECB tighten bank supervision and the ESM (European Stability Mechanism) authorized to recapitalize banks directly rather than through governments (as in Spain). The French believe, rightly, that the negative market reaction to the Spanish bailout shows that a new formula is necessary.

1 comment:

bert said...

Art, I don't want to come over all anglo saxon on you, but I think it might help if I chip in with a perspective from elsewhere in Europe. Right now in the thick of this crisis, France and the French-inspired burbling about growth is a sideshow. Not that a continent-wide integrated growth strategy wouldn't be nice to have. But the gridlocked debate about it is in danger of being overtaken by events.

I think the real story in France is the way Hollande appears to be sleepwalking his way into an attack by the markets. There's the retirement age. Then there's the layoff rules you mentioned the other day. And looking ahead, whatever you think of the fiscal pact, squabbling over it and then missing your numbers is the sort of thing that will attract unwanted attention.

As Henry Hill said, these are the bad times.