European Leaders Struggle to Overcome Fresh Crisis Stalemate

European leaders are struggling to overcome a crisis-fighting stalemate as they face discord over a banking union, Greece’s ongoing debate on how to meet bailout commitments and foot-dragging by Spain and Italy on financial aid requests.

Chancellor Angela Merkel and President Francois Hollande underlined Franco-German disagreement over the weekend as they clashed on a timetable to introduce joint oversight of the region’s banking sector, with Merkel rebuffing Hollande’s appeal to activate it “the earlier, the better.”
Enlarge image European Leaders Struggle to Overcome New Crisis Stalemate

German Chancellor Angela Merkel, right, and French President Francois Hollande attend a press conference at Ludwigsburg Palace on Saturday.

Financial markets “that are watching Europe want to see results,” Merkel said at the meeting on Sept. 22 near Ludwigsburg, Germany, celebrating the two nations’ reconciliation after World War II. Still, “it has to be thorough, the quality has to be good and then we’ll see how long it takes,” she said.

Markets that surged this month on the back of a European Central Bank rescue plan and clarity over bailout funding may not offer European leaders the time they need as an easing in market pressure raises the risk of policy complacency. Deadlock over the banking union could delay until next year a key building block in resolving the crisis, compounding turmoil that’s so far engulfed five of the euro area’s 17 nations.

Via – Bloomberg

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