ECB's Coeure: Banking union could revive money markets - Reuters UK
FRANKFURT, June 16 |
FRANKFURT, June 16 (Reuters) - A European banking union could help revive money markets by restoring confidence in the creditworthiness of banks and governments, European Central Bank Executive Board member Benoit Coeure said.
Coeure, who is in charge of market operations on the ECB's board, called for closer integration as "uncoordinated national reactions to heightened uncertainty could be collectively lethal to the single market for capital".
The ECB is one of the main supporters of such a union, which would involve the introduction of a single European supervisory body, a pan-euro area deposit guarantee scheme and a resolution fund to wind down banks if necessary.
European Commission president Jose Manuel Barroso said he believed a banking union could be in place within a year, but European paymaster Germany says it will not support one unless it is preceded by fiscal union within the euro zone.
"Restoring proper market functioning requires a series of actions to rebuild confidence in the creditworthiness of banks and governments, as well as the taking of decisive steps towards a banking union," Coeure said in a text of a speech released on Saturday and prepared for Morgan Stanley's annual global investment seminar.
Money markets have been impaired since the onset of the financial crisis as banks began to lend less to each other in the market for fear of not getting their funds back, relying instead increasingly on central banks.
To ease such strains, the ECB injected more than 1 trillion euros into the banking system with twin 3-year loan operations in December and February, but there is growing concern that banks are becoming too reliant on central bank support.
"Central bank intermediation of interbank funds was necessary to ensure a smooth transmission of monetary policy across the euro area and to avoid a major credit crunch. However, it may have come at the cost of crowding out some market activity," Coeure said.
A banking union could help revive the market by restoring trust among market players, Coeure said.
"The adverse feedback loop between banks and sovereigns - in which doubts about the solvency of the sovereigns feed doubts about the solvency of the banks, and vice versa - will be broken more readily by the establishment of a true banking union," he said.
Coeure also said Europe's permanent rescue fund, the European Stability Mechanism, should be able to inject capital directly into banks.
"The emergence of truly pan-European banking institutions, provided they are properly controlled, would attenuate asymmetric shocks within member states and favour risk-sharing," Coeure said.
Another key aspect was to strengthen banks' balance sheets and Coeure called upon regulators to make sure that banks would have sufficiently high capital buffers in place.
"Leverage in the euro area banking system must be reduced. The aggregate leverage (asset-to-equity) ratio of large euro area banks remains comparatively high by international and historical standards," Coeure said. (Reporting by Eva Kuehnen; Editing by Alessandra Rizzo, John Stonestreet)
Co-hosts Poland face must-win Euro 2012 game - Football
Published: 16 Jun 2012 - 05:47:21
It is win or bust for co-hosts Poland as they take on the Czech Republic on Saturday knowing that any other result would see them exit the European Championship.
Poland may have played well in their opening two Group A matches but they failed to win either and currently sit third with just two points.
The Czech Republic have three points and failure to win would mean that the Poles could overtake neither the Czechs nor group leaders Russia, who have four points.
It means the co-hosts find themselves in a situation that looked highly unlikely after 45 minutes of their opening game against Greece.
A goal and a man to the good and playing vibrant attacking football, Franciszek Smuda's team looked to be fulfilling the pre-tournament promise that a 2-2 friendly draw with Germany in September had started to foment.
That all looked to be disintegrating as Greece stormed back to snatch a 1-1 draw and could even have won after Polish goalkeeper Wojciech Szczesny was sent off, giving away a penalty to boot.
Substitute goalkeeper Przemyslaw Tyton was the hero as he saved Giorgos Karagounis's spot-kick and kept the Poles from defeat.
Szczesny has served his one-match suspenson and Smuda must now decide whether to recall the Arsenal stopper or stick with PSV Eindhoven's Tyton.
Smuda said he will decide only 24 hours before the game but Szczesny believes the competition is good for them both.
"Whether I play in the last game or not, that's up to the manager. I'm available, I feel confident, I'm ready to play, so I'm hoping I'll be in the starting lineup," he said.
"This is what football's about. You want to fight for your spot. That can only help the team, people fighting for their places."
Things could have been worse for Poland as they trailed 1-0 to Alan Dzagoev's goal for Russia in the next group game but captain Jakub Blaszczykowski's superb equaliser maintained their unbeaten run and kept them in with a shot at qualification.
The hosts have some injury worries, though, with defender Damien Perquis and midfielders Eugen Polanski and Dariusz Dudka all doubts having suffered injuries against Russia on Tuesday.
An abdominal strain has made Dudka the most doubtful of the three while Perquis is recovering from a gashed shin and Polanski is suffering from a bruised knee.
While Poland have injury concerns and need to win, the Czechs are in almost exactly the same boat.
They could qualify with a draw but only if Greece don't beat Russia, otherwise they will be out.
It means they too need to win to be sure of progressing but they have concerns over two crucial players, captain Tomas Rosicky and goalkeeper Petr Cech.
Arsenal midfielder Rosicky is the bigger doubt after what he believes is a recurrence of a calf injury he suffered in the final Premier League game of the season forced him to miss the second half of their 2-1 win over Greece.
Chelsea goalkeeper Cech has a sore shoulder and is desperate to play to make up for his gaffe that allowed the Greeks a route back into a match in which the Czechs had established an early two-goal lead.
"Saturday I'll surely be 100 percent. (Friday) I will be able to train normally without any limitations," said Cech, who insisted the Greek blunder was well and truly behind him.
"I don't look back - the main thing is we won the match," he added.
Both Rosicky and Cech were due to face a fitness test on Friday to determine whether they will be fit or not.
Since the Czech Republic split from Slovakia to form an independent country, they have lost every time they have played away to Poland.
However, the last meeting between the sides was a Czech victory in Prague in a World Cup qualifier three years ago.
Related Poland News
Tunisia lifts curfew imposed following riots - Reuters
TUNIS (Reuters) - Tunisia lifted a night time curfew on Friday imposed earlier this week following riots by Salafi Islamists and others over an art exhibition they deemed insulting to Islam.
One man died in the unrest which broke out on Tuesday in Tunis and started spreading to other parts of the country.
There had been fears of further trouble on Friday after Salafi leaders, who follow a puritanical interpretation of Islam, and the ruling moderate Islamist Ennahda party both called for protests in defence of religion.
But the demonistrations were called off at the last minute after the interior ministry refused to issue licences to the march organisers.
Security forces deployed in large numbers on Friday around the Fateh Mosque, which is dominated by Salafis, but worshippers went home peacefully after prayers.
"After the improvement in the security situation and considering the interests of citizens, the ministry of interior and national defence has decided to end the curfew," the interior ministry later said in a statement on its Facebook page.
The riots were some of the worst clashes since last year's revolt ousted President Zine al-Abidine Ben Ali and launched uprisings across the Arab world.
The violence raised tough questions about the limits of freedom in post-revolutionary Tunisia and fueled fears among Tunisians of a slide into instability.
It also put Ennahda, which leads the government in coalition with two secular parties, in a difficult position as it struggles to satisfy conflicting demands.
While the Islamists did not play a major role in the revolution, the struggle over the role of Islam in government and society has since emerged as the most divisive issue in Tunisian politics and several clashes have erupted in recent months, some of them involving attacks on alcohol vendors.
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Blanc pleased as France impress - Football
Published: 16 Jun 2012 - 06:47:25
France coach Laurent Blanc was delighted after his side ended their record-breaking winless run at major tournaments as their 2-0 victory over Ukraine took them top of Group D.
After missing a number of chances Jeremy Menez and Yohan Cabaye, with his first international goal, scored to leave the French requiring a point from their final match against already-eliminated Sweden to reach the quarter-finals. It also halted a run of eight matches at finals without a win, an unwanted record set in their opening draw against England.
"We'll enjoy this one. As the French know very well, it's been a long time since we won a game at a major tournament," said Blanc.
"We're very happy to have won. Six years in major competitions and to not win a game is a long time. I hope our next win isn't in six years. If it is, then I want be here to talk about it because I'll have been fired long before."
A severe thunderstorm five minutes into the match forced the players off the pitch for almost an hour before the game could be restarted. It did not appear to affect France, however, as they came back out and dominated throughout.
"When the game was suspended our fear was that we wouldn't get to play it. We really wanted to play; we'd prepared for it," Blanc added. "After our slow first 30 minutes against England this time the weather stopped us making a proper start to a game.
"The stadium staff responded well and everything went how it should. We were worried the condition of the pitch would make it difficult to play our game - and we had some plans in place in case it did - but we quickly saw that the pitch was in good condition."
Ukraine coach Oleg Blokhin felt a number of his players became complacent after their opening win had put them top of the group after the first round of matches. Now they have to beat England to progress to the knockout stage.
"As I said, the win against Sweden didn't mean anything, so if we thought we were through, we were wrong," he said.
"I think some players thought that and we'll have a serious conversation with them."
Related France News
Greeks weigh consequences of pivotal vote - Reuters
* Radical left, conservative right neck and neck
* Left threatening to tear up terms of bailout
* Result could push Greece to leave the euro
ATHENS, June 16 (Reuters) - Greeks weighed anger on Saturday at five years of biting recession with a deep fear of being forced from Europe's single currency on the eve of a pivotal election that could send shockwaves through global financial markets.
The vote on Sunday amounts to a referendum on the punishing terms set by international lenders as the price of saving debt-ridden Greece from bankruptcy - tax hikes, job losses and pay cuts that have helped condemn the country to record-breaking recession.
Riding a wave of anger from political obscurity to contender for power, radical leftist SYRIZA leader Alexis Tsipras, 37, is threatening to tear up the bailout deal, saying Europe is bluffing when it threatens to cut Greece loose and risk a broader euro breakup.
On the right, establishment heir and New Democracy leader Antonis Samaras, 61, says that to reject the 130 billion euro ($163.75 billion) bailout deal would force a return to the drachma and even greater economic calamity.
Wrapping up his campaign on Friday night before several thousand supporters waving Greek and EU flags in the capital's central Syntagma square, Samaras said: "We are going into an election to decide the future of Greece and of our children."
The vote is a re-run of a May 6 election that produced stalemate, when anger at the close-knit and often corrupt political clique that has run Greece for years propelled SYRIZA from the political fringe into second place.
"My heart says I should vote for the left, for all the horrible things these (mainstream) politicians have done to us, but my mind says vote for the right, so that Greece does not leave the euro," said part-time teacher Kostas Manitsas, 28.
A SYRIZA victory on Sunday could sow turmoil on global financial markets, just as leaders of the Group of 20 world economic powers gather in Mexico for a meeting dominated by the crisis.
COALITION NEGOTIATIONS
"Tomorrow's vote must not be based on anger but on hope," the liberal left daily Ta Nea implored in an editorial. "It must be based on the Greece of the euro, not the Greece of the drachma."
Greeks say they want to keep the euro, but they do not want the pension, wage and jobs cuts imposed by the bailout package and which have seen living standards plummet and unemployment reach almost 23 percent.
The country's lenders in the European Union and International Monetary Fund say they cannot have one without the other.
"Public opinion polls, as well as the May 6 vote, show that those who want the euro overwhelmingly outnumber those who reject it or are willing to sacrifice it for their own party-political purposes," wrote the centre-left daily Ethnos.
Opinion polls published until a ban two weeks ago put the two parties almost neck and neck. Neither is expected to win outright, triggering coalition talks.
Eurogroup head Jean-Claude Juncker urged Greeks not to turn their backs on the euro, for their own sakes as well as the sake of the 17-member currency union, with the far larger economies of Spain and Italy also on the ropes.
"If the radical left wins - which cannot be ruled out - the consequences for the currency union are unforeseeable," Juncker, head of the group of euro zone finance ministers, told Austrian paper Kurier.
"We will have to speak to any government. I can only warn everyone against leaving the currency union. The internal cohesion of the euro zone would be in danger."
Woods in the hunt at US Open - Reuters
By Julian Linden
SAN FRANCISCO (Reuters) - Tiger Woods charged into a share of the lead in the second round of the U.S. Open on Friday as Rory McIlroy's title defense collapsed on another brutal day at the Olympic Club.
Woods had the galleries buzzing with anticipation that his major championship drought was about to end as he conjured up all his old magic to tame the notoriously difficult course and join Jim Furyk and David Toms in a three-way tie for the lead at one-under par 139.
The former world number one has not won a major in four years but the omens are good this time. Of the nine previous times Woods has led a major at the halfway state, he has gone on to win eight.
"Being patient is certainly something that we have to do in major championships and I think I've done a pretty good job of that over the years," said the 14-times major winner.
"I won my fair share, and I understand how to do it."
It was not an easy day for Woods. The 36-year-old stumbled midway through his round, making three successive bogeys on the front nine, and had to scramble hard as the Pacific Ocean winds picked up in the afternoon.
But he maintained his composure to finish with an even par 70 after Furyk, the 2003 U.S. Open champion, set the standard with a 69 and Toms, the 2001 PGA Championship winner, matched Woods with a 70 as the sun started to set in Northern California.
"I'm sure they (spectators) will be going crazy for Tiger out there this weekend and rightfully so. He brings a lot to our game," said Toms. Continued...
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