Strategic Briefing | 9.7.2011 | The Crisis In Europe

In Euro Zone, Banking Fear Feeds on Itself
The New York Times | Sep 7
“This crisis has the potential to be a lot worse than Lehman Brothers,” said George Soros, the hedge fund investor, citing the lack of an authoritative pan-European body to handle a banking crisis of this severity. “That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”
German court gives MPs bigger say in euro bailouts
Reuters | Sep 7
Germany’s highest court said parliament must have a bigger say in euro zone rescue packages, a landmark ruling that may make it more difficult for Europe to respond swiftly in delivering aid to crisis-hit member states.

EU parliamentarians fear debt crisis damage to Europe
Deutsche Welle | Sep 7
The next act in the Greek debt tragedy, regarding the declining eurozone and its nascent rescue, is upon us: It now seems that Greece may not be able to fulfill the requisite conditions to qualify for further financial aid from Europe. This has stirred much ire within the German government. Some, few lawmakers are calling for Greece to be ejected from the single currency zone.
German austerity drive risks Euro-slump
The Telegraph | Sep 6
German finance minister Wolfgang Schäuble has vowed to halt rescue payments to Greece unless the country complies totally with the EU-IMF demands, brushing aside warnings that a Greek collapse would set off a disastrous chain reaction and a global banking crisis.
Finland May Quit Second Greek Rescue If Collateral Denied, Katainen Says
Bloomberg | Sep 7
Finnish Prime Minister Jyrki Katainen said his country may not contribute to a second Greek bailout package if demands for collateral in exchange for new loans aren’t met. Such an outcome “remains a possibility,” Katainen told reporters after delivering a speech in Helsinki today. “It depends on the collateral issue.” Finland is at the center of a collateral dispute that threatens to stall Greece’s second rescue package and exacerbate Europe’s debt crisis. Katainen had earlier this month pledged to find a model that satisfies the AAA rated nation’s insistence on extra assurances its bailout funds be repaid without putting other euro members or creditors at a disadvantage.
Greece ‘to speed up cost-cutting work’
BBC | Sep 7
The Greek finance minister has pledged to speed up reforms to cut public spending and reduce the size of the state, saying his privatisation plans would start “immediately”.
Italy austerity plan faces Senate confidence vote
Reuters | Sep 7
Italian Prime Minister Silvio Berlusconi faces a confidence vote in the Senate on Wednesday following the latest changes to a widely criticised austerity package aimed at staving off financial crisis… Italy, the euro zone’s third largest economy, has been at the centre of the debt crisis since the start of July when markets began to doubt its commitment to cutting its 1.9 trillion debt mountain. Only intervention by the European Central Bank to buy Italian bonds has kept its borrowing costs from soaring out of control and destabilising the entire euro zone. But the ECB has warned that its support could not be taken for granted. Berlusconi’s centre-right coalition has been deeply split over whether to raise taxes or hit pensions with Economy Minister Giulio Tremonti, once seen as the guarantor of financial stability, appearing increasingly isolated.