« France & Germany say 'no increase' for EU bailout fund »

Latest columns from Ambrose Evans - updates on Portugal and everyone else in bankrupt Europe, not unlike the broke and busted U.S...

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Germany and France have rejected calls by Brussels for a rapid increase in the size and powers of the EU's rescue machinery, once again exposing serious differences at the heart of monetary union.

Jose Barroso, head of the European Commission, called on EU leaders to boost the firepower of the EU's €440bn (£366bn) bail-out fund and beef up its role, allowing it to intervene with pre-emptive bond purchases to help states under threat.

"It is important for the markets to know that Eurozone leaders are committed to do whatever is necessary," he said, hoping for action as soon as early February.

He also proposed a "new phase of European integration" with far-reaching oversight of the budgets, pensions, labour markets, and trade flows of EU states to prevent a recurrence of the imbalances that led to the EMU debt crisis.

Mr Barroso said the fund boost was a "precautionary" move, not directed at any one country. The gambit is risky since it may be taken by investors as a sign that Brussels fears imminent contagion to Spain, deemed too big for the current fund.

• The response in Paris and Berlin was chilly. "We think the fund is big enough," said Francois Baroin, France's budget minister. German Chancellor Angela Merkel said the bail-out mechanism was "nowhere near exhaustion", adding curtly that she did not wish to debate the matter "any further".

Continue reading at the UK Telegraph...

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More recent columns from Ambrose...

EMU debt crisis edges ever closer to the core

The eurozone's debt crisis is once again in danger of spiralling out of control after yields on Portuguese debt spiked to a post-EMU high and contagion hit Spain and Belgium.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8251389/EMU-debt-crisis-edges-ever-closer-to-the-core.html

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Portugal defiant as pressure builds for rescue

Portugal's leaders vowed yesterday to overcome the country's debt woes without the need for an EU-IMF loan package, despite dissent within its own central bank and pressure from northern Europe for a fast resolution of the crisis.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8253589/Portugal-defiant-as-pressure-builds-for-rescue.html

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Portugal succeeds in selling bonds amid bailout pressure

Portugal, facing pressure to follow Greece and Ireland and agree to a financial bailout, succeeded in selling €1.25bn (£1bn) of bonds in an auction seen as a key test of investor confidence.

The country managed to sell €650m of bonds due in 2014 and €599m of bonds due in 2020.

The yield, or the price investors charge Portugal to hold its debt, on the shorter-term debt was 5.396pc, higher than the 4pc investors looked for in an October bond sale.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8254735/Portugal-succeeds-in-selling-bonds-amid-bailout-pressure.html

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Eurozone rates held but Jean-Claude Trichet turns more hawkish

The European Central Bank has signalled that the growing threat of inflation could prompt it to raise interest rates across the eurozone sooner than expected.

http://www.telegraph.co.uk/finance/economics/interestrates/8258019/Eurozone-rates-held-but-Jean-Claude-Trichet-turns-more-hawkish.html

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The dam breaks in Portugal

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100009218/the-dam-breaks-in-portugal/

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