EMERGENCY TALKS ARE being held by finance chiefs from the world’s major powers today in an attempt to contain the twin financial crises in Europe and the US.
The downgrading of the United States’ AAA credit rating (for the first time ever) and fears that the eurozone debt crisis could spread to Spain and Italy have shaken the markets over the past number of days, reports the Financial Times (free subscription required).
Finance ministers from G7 leading industrial countries have been urgently discussing how confidence in the US economy might be bolstered ahead of the stock markets opening on Monday morning, according to the Guardian. British Chancellor George Osborne is also reportedly urging France and Germany to back the issuing of eurobonds – which would see them underwrite the debts of poorer countries in exchange for being involved in the running of their economies in the future.
The European Central Bank is to hold an emergency meeting today to discuss the possibility of buying Italian government debt ahead of the markets opening on Monday, RTÉ reports.
Meanwhile, China has called upon the US to “live within its means”, the FT reports, with national media saying that some Asian economies stand to lose the most by the United States’ credit rating downgrade. “The lowering of the United States’ long-term sovereign credit rating has sounded a warning bell for the international currency system dominated by the US dollar,” economist Sun Lijian wrote in the People’s Daily, reports Reuters.