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German Chancellor Angela Merkel is prepared to let Greece leave the eurozone if Greeks elect a government that jettisons the country’s current austerity course, according to German media reports. The report in the Der Spiegel daily, which cited sources close to the German government, comes as polls show a radical leftist party leading the field three weeks ahead of a snap election in Greece. The Syriza party of Alexis Tsipras has pledged to reverse reforms imposed by Greece’s international creditors and renegotiate its bailout deal. …

EU development ministers met today (12 December) in Brussels and adopted a “perspective” to boost the role of the private sector in the field of development cooperation. But leading NGOs warned that placing the private sector at the center of EU development policy “shows ministers have failed to acknowledge its limitations”. EU ministers adopted Council Conclusions, which contain strong language in favor of engaging more with the private sector. Ministers state that the private sector “is emerging as an increasingly active player in the development field”, and describe its role as “key” for implementing the future sustainable development goals. Ministers...

European Commission president Jean-Claude Juncker has indicated he will try and get around member states’ veto powers over fiscal issues when he proposes new laws to clamp down on tax avoidance. In an interview with the Frankfurter Allgemeine Zeitung, he said he may use a majority vote to get a forthcoming law on the automatic exchange of tax rulings (letters that give companies favorable tax conditions) passed. “I have not excluded that we change the rules using a qualified majority (of member states). I will leave the technical and legal aspects aside now, but it would affect aspects of administrative...

A top level economic report on Thursday urged European heavyweights France and Germany to implement urgent economic reforms, warning that Europe risked falling into a “stagnation trap”. “In France, we fear lack of boldness for decisive reforms. In Germany, we fear complacency,” said the report, drawn up by two leading economists for the French and German governments. In a hotly-awaited set of proposals to jumpstart the traditional Franco-German motor that drives the European economy, Henrik Enderlein and Jean Pisani-Ferry concluded: “France and Germany spend a lot of time on joint declarations and initiatives. We miss action.” […] “We think the...

China’s central bank unexpectedly slashed interest rates on Friday to re-energize the world’s No. 2 economy, joining a growing list of major economies that are trying to encourage growth in the face of a global slowdown. On top of the rate cut, Chinese authorities promised to inject credit into the financial system if needed. Meanwhile, the president of the European Central Bank said Friday he was ready to step up stimulus for the 18-country eurozone economy, whose performance continues to disappoint. And Japan’s government this week delayed a tax increase after the country slipped back into recession. News of China’s...

Dutch Finance Minister Jeroen Dijsselbloem has acknowledged that the Dutch government drew up plans for what to do if the single European currency had collapsed during the summer of 2012. In an interview with RTL television on Tuesday, Dijsselbloem said there was a plan to return to the Dutch guilder in a worst-case scenario. …

The European Central Bank on Thursday (6 November) formally made public a letter showing that the eurozone bank threatened to pull emergency bank funding if Ireland did not enter a bailout and undertake austerity measures in 2010. The letter, signed by the then-ECB president Jean-Claude Trichet, speaks of “great concern” about the solvency of Irish lenders—which had loaned heavily to the overheated construction sector—and the extent to which the whole eurosystem was exposed. It then says that the ECB would cut off emergency funding to Irish banks unless Ireland meets four conditions, including getting a bailout and undertaking “fiscal consolidation,...

ECB ready to pump €1 trillion into euro zone economy Central bank ramps up efforts to rescue single currency bloc from deflation risk The European Central Bank is ready to inject up to €1 trillion of new liquidity into the euro zone economy as it ramps up efforts to rescue the single currency bloc from the risk of Japanese-style deflation, Mario Draghi confirmed yesterday. The ECB president also said the central bank’s governing council was unanimous in its commitment to use further unconventional tools, including quantitative easing, should economic conditions deteriorate. He added that the central bank had stepped up...

The European Union is accused of “breathtaking hypocrisy” for continuing to demand that David Cameron pays a £1.7 billion bill despite its own auditors failing to give a clean bill of health to more than £100 billion of spending by Brussels. According to the annual report of the European Court of Auditors, seen by The Telegraph, £5.5 billion of the EU budget last year was misspent because of controls on spending that were deemed to be only “partially effective” by experts. The audit, published this morning, found that £109 billion out of a total of £117 billion spent by the...

The eurozone is struggling to revive itself, and may slip into recession in the next two years, slowing down the global economic recovery, according to the French Economic Observatory (OFCE). The director of the OFCE’s analysis and forecast department, Xavier Timbeau, presented his economic predictions for 2014-2015 on 29 October, saying “the eurozone is a problem for the global economy”. The expert believes that the eurozone is acting as a brake on the world economy, and will enter into “a phase of low inflation or even deflation in certain countries,” leading to a eurozone recession within two years. The Observatory’s...

British Prime Minister David Cameron insisted Friday he would not pay a European Union bill for an additional €2.1 billion ($2.65 billion) contribution to the EU coffers at a time of increasing pressure at home for the country to leave the bloc. Thumping his fist in frustration, Cameron said “people should be in no doubt: as an important contributor to this organization, we are not suddenly going to get out our checkbook and write a check for €2 billion. It is not happening.” Cameron said asking Britain for a top-up of some 20 percent in its contributions on short notice...

Germany will get an early Christmas present of around €779 million from the EU, thanks to weaker than expected GDP growth. It will receive the rebate on its contributions to the European Union on December 1st, while Britain will have to pay €2.1 billion on the same day. “The British economy is growing much faster than the others, and the logic is the same as with tax: if someone earns more, they pay more tax,” EC spokesman Patrizio Fiorilli told AFP. …

Europe’s biggest banks are facing a day of judgment as the European Central Bank prepares to unveil the results of a yearlong search through the dark corners of their finances. It’s a step that comes none too soon for the struggling economy of the 18-country eurozone. The ECB review to be unveiled Sunday seeks to identify banks that are too weak to lend to businesses or make it through another recession and force them to strengthen their finances. It includes a detailed look at 130 banks’ loans, holdings and investments, as well as a so-called stress test that simulates how...

Here we go again. Another sovereign debt crisis on the periphery of the EU is underway and many of the same factors that led to previous debt meltdowns are present. Germany is headed for a triple dip recession. Continent-wide deflation is nearly a reality. And many EU nations are smashing the debt limits demanded by treaty, thus threatening the Euro itself. All of this is impacting the percentage of debt in relation to GDP in several countries, making government bonds more expensive and debt servicing a nightmare. The Hill: Among Europe's most recent economic tremors has been the growing evidence...

Eurozone in danger of repeating Japanese stagnation, IMF chief warns By Benjamin Fox BRUSSELS - International Monetary Fund boss Christine Lagarde has warned that the eurozone risks following Japan and falling into a prolonged cycle of recession and stagnation. Speaking on Thursday (9 October) ahead of the IMF's annual meeting in Washington DC, Lagarde said: “We have also alerted to the risk of recession in the eurozone", putting the likelihood of a drop in output at "between 35-40%, which is not insignificant". “We are not saying that the eurozone is heading towards recession, but we are saying that there is...

Ireland’s economy is growing at a rapid pace last experienced at the tail-end of the Celtic Tiger boom, government statisticians reported Thursday as economists declared an end to the country’s financial doldrums. The report from the Central Statistics Office said gross domestic product grew 7.7 percent from July 2013 to June 2014, the biggest annual rate of growth since early 2007. It said quarterly GDP rose 1.5 percent versus the January-March quarter. Finance Minister Michael Noonan said the figures suggested that Ireland would record around 4.5 percent GDP growth this year, accelerating the country’s escape from debt woes that forced...

Investors have bought billions of euros in German treasury notes that pay negative interest—meaning the purchasers agreed to pay a small fee for the privilege of lending the German government their money. […] Germany auctioned €3.34 billion ($4.3 billion) Wednesday in two-year notes at an average yield of minus 0.07 percent. Rates are very low all over, and German debt is considered ultra-safe, so security-minded investors are paying for safety. Expectation the European Central Bank will buy bonds has also driven down yields, which move opposite to prices. And the small negative yield on the notes is still a better...

For the struggling Spanish shopkeeper or the Portuguese restaurant owner, the European Central Bank’s latest economic stimulus plans won’t likely provide much relief anytime soon. If ever. Confronting a stalled economy and painful unemployment across Europe, the ECB is doing what it can. It surprised economists and investors Thursday by cutting its benchmark interest rate to a record-low 0.05 percent. And it announced plans to pump money into the financial system by buying bonds backed by assets such as auto and credit-card loans. But Europe faces a crushing array of problems—from burdensome regulations to growth-killing budget policies—that analysts say remain...

The debate over Germany’s insistence on eurozone austerity has flared anew as an ailing France continues to demand economic stimulus. The European Central Bank may now be siding with Paris, leaving Merkel looking increasingly alone. […] Berlin is particularly alarmed by the stance taken by ECB head Mario Draghi. At the annual conference of top central bankers from around the world at Jackson Hole, Wyoming in August, Draghi surprised those present by saying “there is leeway to achieve a more growth-friendly composition of fiscal policies.” It was a comment that came close to the kind of debt-fueled growth stimulus measures...

Wall Street banks could desert Britain if the country decides to leave the European Union, senior figures in the industry have reportedly said. Some major institutions are believed to be already drawing up plans to move activities abroad amid concerns that the UK is drifting further away from the EU. Most US and Asian banks currently run their main European operations from the UK, which gives them a passport to provide services across the EU. But if the UK left the European Union, it is believed to be unlikely foreign banks based in London would carry on receiving the same...