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Wednesday, July 20, 2011

European Commission president: Now is the Time to Act

by Calculated Risk on 7/20/2011 04:05:00 PM

The emergency EU summit in Brussels on Thursday is viewed as critical. The Finance Ministers will meet in the morning, and the European leaders later in the day. I don't expect an announcement until late in the evening (probably well after U.S. markets close tomorrow).

From Bloomberg: Barroso Says Summit Failure on Greece Would Cause Global Damage

“Nobody should be under any illusion; the situation is very serious. It requires a response. Otherwise, the negative consequences will be felt in all corners of Europe and beyond.
“The minimum we must do tomorrow is to provide clarity on the following: measures to ensure the sustainability of Greek public finances; feasibility and limits of private-sector involvement; scope for more flexible action through the European Financial Stability Facility, the EFSF; repair of the banking sector still needed; and measures to ensure the provision of liquidity to our banking system.”

“Most of the decisions to be taken tomorrow belong to the competence of the member states. They have reserved the instruments to themselves and they have said they will do what it takes to ensure the stability of the euro area. Well, now is the time to make good on that promise.
From the WSJ: Pressure Mounts on Greece Meeting
French Finance Minister Fran├žois Baroin said euro-zone leaders are expected to deliver a "strong message" at the summit, while Foreign Minister Alain Juppe said on French television he was "convinced" leaders will find an agreement. "There are difficult technical aspects and slowness in the decision process, but on the objective there is a large consensus," said Mr. Juppe.

The French optimism contrasts with comments Tuesday from Ms. Merkel, who said there won't be "one spectacular step" at the Brussels summit, and that it would rather be the first of a "step-by-step measures ... with the final goal of finally getting to the roots of (the) problem."
"Today we have a historic choice," said Mr. Juppe. "Either we go backwards, and we let what we've built collapse. That would be an absolute catastrophe for every country. Or we go further."
Earlier on Existing Home Sales:
Existing Home Sales in June: 4.77 million SAAR, 9.5 months of supply
Existing Home Sales: Comments and NSA Graph
Existing Home Sales graphs