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Dublin: 15 °C Sunday 19 May, 2013

Emergency talks held over twin debt crisis

Finance heads from the EU and USA are discussing ways to bolster confidence in their economies ahead of markets opening on Monday.

Twin debt crises in Europe and the US have led to emergency talks.
Twin debt crises in Europe and the US have led to emergency talks.
Image: MARTIN MEISSNER/AP/Press Association Images

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.

Read: Downgraded: US loses AAA credit rating for the first time ever >

Explainer: Why are the markets in chaos, and should you be worried ? >

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Comments (11 Comments)

  • i wonder what the Chinese version of Friends will look like

    Reply
    • China is going to go bust sooner or later. Let’s face it, it’s impossible to keep growing at that rate forever. It will be very interesting when that happens, and not at all in a good way.

      Reply
    • philince 07/08/11 #

      Don’t think that will happen for a long them. Public debt is only around 16% of GDP. In a country of that size, 1 billion people, it will take a lot for them to get into a greek/irish/american style debt crisis. Growth will slow in years to come, but they won’t go bust. It’s not impossible to keep growing, if you have the right amount of resources, market demand and competitiveness and the right policies and a strong government to guide it. What’s going on is a major swing from the old western economies to the new economy superpowers like China and India.

      Reply
  • China has it spot on, the first commentator I’ve seen to correctly identify the root cause of the problems, both here and in the U.S.
    Just about every household in the country has to budget to live within its means, yet that’s something that seems beyond the comprehension of our elected representatives….

    Reply
  • So they have decided to issue Eurobonds to interfere in other "poorer countries" economies is the best option. So basically give a poor country some Eurobonds and then take control of that country sell off it’s resources and then what? This is yet another way of invading a country, so rather than using army’s it’s a economic war they are declaring. This is just ridiculous. Stop the markets it’s a TMR situation for both the US and eurozone. Total Market Restructure is the only answer. The system is broken stop trying to put a band-aid on a broken leg.

    Reply
  • The Chinese have played the last decade or so brilliantly. The US right wing market fundamentalists, bankers and idiots like Greenspan and Bush have lead an all too willing America down the path of its own decline.
    But the Chinese have been right behind giving the US that extra push that was needed. US companies want to destroy the power of organised labor? Well China is there to provide outsourced labor at slave wages and slave conditions to do it. US banks want to get American citizens in debt up to their eyeballs to keep them as debt slaves for the rest of their life? Well China will lend them the money to do it, and send them the goods to spend their money on. China is well on the way to overthrow US supremacy without a shot being fired. All China needed was the co-operation of the US companies, bankers and right wing billionaires to do it. Until And until China lets the Yuan float freely on the currency markets they have no right to demand anything.

    Reply
  • That’s an interesting comment from George Osborne given that Britain isn’t even in the Euro and is one of the more ant-EU countries. What’s the benefit for Britain if France and Germany get to be the de facto rulers of countries they have underwritten?

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  • So England wants Germany and France to take over poor countrys.Its time our goverment pulled out of europe and the euro asap.Whats the point of staying in it if we as a country dont have control of our day to day running.Is it because the doller is failing and the euro is dead that england sees the pound as the one that can take over the world.

    Reply
  • What country was kicked out of the g8?

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  • How come it’s mostly the catholic countries that behaved irresponsibly and lived on credit?

    Reply

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