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Eurozone leaders lack vision, must slash debt analysts say

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(PARIS) - With the eurozone debt crisis spreading to Italy and Spain, European leaders faced even more pressure with the results due Friday of critical stress tests on Europe's troubled banks.

Here are the views of some leading figures and analysts.

- Former top European leaders, including former European Commission president Jacques Delors and Spain's former prime minister Felipe Gonzalez, said in a commentary that today's leaders "lack a clear vision of the stakes" and therefore the necessary willingness to put their credit on the line to get "past the immediate challenges."

- Jean-Dominique Giuliani, head of the Robert Schuman Foundation think tank, said "the spectacle displayed by Europeans in the Greek crisis is disastrous ... Europe is dancing on the edge of the abyss."

- VTB Capital economist Neil MacKinnon said the result of European bank stress tests due out on Friday, if poor, could threaten "the longer-term viability" of a monetary union caught in "the deadly embrace between under-capitalised banks and over-indebted governments."

- Marie Diron senior economic advisor at Ernest and Young said the stress tests "are unlikely to bring much relief to the current tensions that plague the eurozone" as the credibility of the tests "has been undermined by what is perceived to be too lenient assumptions."

- Analyst Michael Turner at RBC Capital Markets said the stress test results "still loom large" but are "toothless to a large degree" as they "do not include the scenario of a sovereign default."

- Italian business daily Il Sole 24 Ore said that when Italians have their backs to the wall, they know "what has to be done," but that "without growth there is no financial rigour that will be able to shelter Italy for long from the uncertainty and appetite of the markets."

- German government spokesman Steffen Seibert said of a mooted EU summit on finalising a second Greek bailout package -- "it's not a meeting as such that will help Greece, it's a new (aid) package.

"It's not a competition about fixing a date," he said, adding that such a meeting should take place only "if it is meaningful and useful."

- Forex.com research director Kathleen Brooks said the sovereign debt crisis was "now spreading its tentacles throughout the western world.

"For too long falsely benign conditions meant that countries in the West could amass huge amounts of debt. But now the market's view has changed." This "will no longer be tolerated."

- After downgrading Greek's leading private banks on Friday, Fitch said that the downgrade reflected the "deteriorating creditworthiness" of Greek banks and "to serious concerns about the Greek sovereign and the economy."

- Carol Sirou, head of Standard and Poor's in Europe, said ratings agencies were not "hot heads" and that their work did not intend to "feed fears uselessly.

"It is not about throwing oil on fire, it's about informing," Sirou said.


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