News / Europe

EU Leaders Agree on Growth Pact; Italy, Spain Refuse to Sign On

European flags are displayed outside the great hall of the Brussels European Council on June 27, 2012.
European flags are displayed outside the great hall of the Brussels European Council on June 27, 2012.
VOA News
European Union leaders meeting at a summit in Brussels Thursday have agreed to set aside about $150 billion to stimulate growth in the bloc's weakest economies.  

European Council President Herman van Rompuy announced the so-called "growth pact" which was rejected by Italy and Spain.

"The key element is that we boost the financing of the economy by mobilizing around 120 billion euros  (close to $150 billion ) for immediate growth matters," said van Rompuy. "A 10-billion-euro increase of the capital of European investment banks will increase the banks' overall lending capacity by 60 billion and this money must flow across Europe, not least to the most vulnerable countries and help companies grow themselves out of the crisis.''

Italy and Spain say their borrowing costs are too high and they are seeking short-term measures to ease market pressure.  The discussion will continue Friday.

Both Rome and Madrid, with the eurozone's third and fourth largest economies, have watched in recent days as the interest rates on their loans have soared to near the 7 percent level.  That is the mark at which much smaller economies Greece, Ireland and Portugal were forced to secure international bailouts in the last two years.

If Italy and Spain used the eurozone's bailout fund for their debt sales, it could cut their borrowing costs because they no longer would be subject to the whims of speculators on world markets.

Spanish Prime Minister Mariano Rajoy warned this week that his government will not be able to sustain its high borrowing costs for much longer.  He won support from French President Francois Hollande, who said as he arrived at the summit that he was looking for "very quick solutions" to support Italy and Spain.

Efforts to ease the plight of Italy and Spain overtook the initial summit focus on Germany, which has the currency bloc's most robust economy.

Some European leaders are advocating the sale of eurobonds, debt supported by the entire 17-nation eurozone, not just individual governments.  But Berlin has opposed their adoption, fearing that its borrowing costs could jump even as those for weaker governments drop.

German Chancellor Angela Merkel this week called eurobonds "economically wrong and counterproductive."  But finance minister Wolfgang Schaeuble signaled Germany may be shifting in its adamant opposition.

He told a U.S. business publication, The Wall Street Journal, that Germany could agree to some form of shared eurozone debt if it is convinced that the move toward central European control over the spending practices of the eurozone's individual governments is "irreversible and well-coordinated."  He said there would be no common bonds "without a common fiscal policy."

The new $150 billion package to boost the eurozone's stagnant economy amounts to about 1 percent of the eurozone economy, but the effect of the spending is uncertain because most of the money had already been earmarked for development projects.


Some information for this report was provided by AP, AFP and Reuters.

You May Like

Multimedia Obama, Modi Break Nuclear Deal Deadlock

Impasse over liability issues had been stalling bilateral civilian nuclear cooperation; deal reached at start of US president's three-day visit to India More

WHO's Late Efforts in Tackling Ebola Highlight Need for Reform

Health experts debate measures to reform agency’s response to global public health emergencies in special one-day session on deadly outbreak More

One Tumultuous Year in Power for CAR's President

As sectarian violence raged across Central African Republic, interim President Catherine Samba-Panza has Herculean task: to end civil war and put country back on right track More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Worldwide Photo Workshops Empower Youthi
X
Julie Taboh
January 23, 2015 11:08 PM
Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.
Video

Video US Marching Bands Grow Into a Show of Their Own

The 2014 Super Bowl halftime show was the most-watched in history - attracting an estimated 115 million viewers. That event featured pop star Bruno Mars. But the halftime show tradition started with marching bands, which still dominate the entertainment at U.S. high school and college American football games. But as Enming Liu reports in this story narrated by Adrianna Zhang, marching bands have grown into a show of their own.
Video

Video Secular, Religious Kurds Face Off in Southeast Turkey

Turkey’s predominantly Kurdish southeast has been rocked by violence between religious and secular Kurds. Dorian Jones reports on the reasons behind the stand-off from the region's main city of Diyarbakir, which suffered the bloodiest fighting.
Video

Video Kenya: Misuse of Antibiotics Leading to Resistance by Immune System

In Kenya, the rise of drug resistant bacteria could reverse the gains made by medical science over diseases that were once treatable. Kenyans could be at risk of fatalities as a result if the power in antibiotics is not preserved. Lenny Ruvaga has more on the story from Nairobi.
Video

Video Solar-Powered Plane Getting Ready to Circumnavigate Globe

Pilots of the solar plane that already set records flying without a drop of fuel are close to making their first attempt to fly the craft around the globe. They plan to do it in 25 flying days over a five month period. VOA’s George Putic reports.
Video

Video How Experts Decide Ethiopia Has the Best Coffee

Ethiopia’s coffee has been ranked as the best in the world by an international group of coffee connoisseurs. Not surprisingly, coffee is a top export for the country. But at home it is a source of pride. Marthe van der Wolf in Addis Ababa decided to find out what makes the bean and brew so special and how experts make their determinations.
Video

Video Yazidi Refugees at Center of Political Fight Between Turkey, Kurds

The treatment of thousands of Yazidis refugees who fled to Turkey to escape attacks by Islamic State militants has become the center of a dispute between the Turkish government and the country's pro-Kurdish movement. VOA's Dorian Jones reports.
Video

Video World’s Richest 1% Forecast to Own More Than Half of Global Wealth

The combined wealth of the world's richest 1 percent will overtake that of the remaining 99 percent at some point in 2016, according to the anti-poverty charity Oxfam. Campaigners are demanding that policymakers take action to address the widening gap between the ‘haves’ and the ‘have nots’, as Henry Ridgwell reports for VOA from London.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid