T E N E R I F E ’ S O N LY Issue 683
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W E E K LY N E W S PA P E R
17 December 2010 - 23 December 2010
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Euro’s set to be stabilised EU Summit meets to ensure financial security of Europe. THE PRIME Minister, José Luis Rodríguez Zapatero, has travelled to Brussels for the European Council. The 27-strong group are to discuss the establishment of a permanent mechanism to ensure the financial stability of the euro area. In this regard, the Heads of State and Government will seek backing for the euro to support the stability of the single currency. The European Council in Brussels will focus on the reform of the Lisbon Treaty. The European Council receive the report of the President of the European Council on any necessary amendments to the Treaty for member states of the euro area to establish a permanent mechanism to ensure the financial stability of the entire euro area. The European Council also must give its approval to the general characteristics of the new mechanism. This will consider the agreement reached by the Eurogroup on 28 November 2010. The permanent facility is designed to replace the European Financial Stability
Fund (FEEF), which will run until June 2013. It is also hoped that the European Council to give fresh impetus to the six legislative proposals on economic governance presented by the Commission and considered within the Task Force in Van Rompuy, in order to reach an agreement in June 2011. Te Brussels European Council will review the remaining economic initiatives and in particular the package of legislative pro-
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posals to strengthen economic pillar of EMU and how to further implement the strategy ‘Europe 2020’. It will also address the question of the EU budget. The Heads of State and Government of the EU will meet Thursday afternoon at the first working session, and later to maintain a working dinner. On Friday, 17th there will be a second workshop. On this day, the Prime Minister, José Luis Rodríguez
Zapatero, is scheduled to appear before the media. Reports state that the German chancellor does not want to pour more euros into the current EU rescue fund. It is thought that the twoday meeting will be an opportunity to squash the current ‘jittery’ climate and it’s expected to see an agreement to set up a permanent system for rescuing countries that get heavily into debt.
Meanwhile concern over Spain’s financial stability continued as it was forced to pay a higher rate of interest in a government bond sale. Spain has been under financial market scrutiny since the Irish Republic was forced to take an aid package of 85bn euros (£72bn; $113bn) last month. That bail-out followed the 110bn-euro rescue of Greece in May. Spain is now paying 1997
levels to finance her debt. Spain now has to pay interest at 1997 levels to finance its debt, with an 18% jump on ten year bonds paying 5.4855 marginal interest, and a 31% jump on 15 year bonds to 5.968% reached today, Thursday. The Spanish treasury managed to place 2.4 billion, with the offer remaining 1.8 times oversold. The EU will be sending a message of ‘calm and reflection’ from Brussels today where the leaders of the 27 countries are meeting to discuss how to strengthen the Euro. The doubts over Spain are not helping matters and Brussels will do all it can to dispel talk of any rescue of Spain being needed. The summit means that the EU leaders have met seven times this year, a number never seen before. Meanwhile the Spanish Banking Association, AEB, has said that for the year to September, banks’ profits were down by some 13%, after more provisions were set aside for bad debt. The banks made 11.089 billion over the nine months, compared to 12.71 billion for the same period last year. The amount of money put aside has reached 12.367 billion, up 2.3%. Continued on page 4.