European leaders agreed on Friday to police thousands of eurozone banks beginning next year as they sought to create much-needed jobs in their austerity-battered economies.
By the close of a two-day summit, France and Germany had patched up differences over how to beat the debt crisis, with the new watchdog for 6,000 banks a key condition for allowing a dedicated rescue fund to re-float troubled lenders.
Leaders cited “significant progress” on a 120 billion euro (US$155 billion) package of measures to try to kickstart a climb out of recession as social and political unrest hits Spain as well as Greece.
However, the bank deal appeared to come too late for Spanish lenders, who need recapitalization to the tune of some 40 billion euros that Madrid had hoped would not be added to its public debt burden for fear of sparking new pressures on money markets.
German Chancellor Angela Merkel told reporters that direct recapitalization by the eurozone rescue fund could not be retroactive, that it “will only be possible for the future.”
Fellow hardliners the Netherlands and Finland adopted the same view when finance ministers from the three states met last month in Helsinki, seemingly reversing plans carefully laid down by the eurozone in June.
France is still pleading for the “Helsinki” trio to come round.
A top EU official speaking anonymously after the summit ended said Paris has concerns about spillover effects from Spain, and maintained Merkel’s remark came as “a surprise” as the 27 EU bloc leaders “did not settle this.”
This official said the Spanish bank bailout could benefit from some direct recapitalization later in the process, once the watchdog is up and running — supposed to be later next year.
Spanish Prime Minister Mariano Rajoy faces growing political problems with a general strike called for Nov. 14 and key elections in the autonomous Basque Country yesterday and independence-minded Catalonia next month.
Rajoy said the direct aspect of recapitalization was not an “urgent” issue for Spain, while talk of sovereign aid — expected to take the form of a credit line initially — also remains on the back-burner.
With market pressures considerably eased since the summer, the fresh commitment bird’s eye bank supervision led by the European Central Bank (ECB) is supposed to anchor a re-designed economic and monetary union.
Leaders are beginning to believe — after three years in full crisis mode — that the euro can be made more attractive to influential EU states still outside the currency bloc like Poland, one of the bloc’s strongest economies.
After an 11-hour session into the wee hours to reach the bank supervision deal, Merkel said it was about ensuring a “solid legal framework” as the ECB puts in place “hundreds” of staff.
The target date here is Jan. 1 next year, Merkel citing a need for “democratic legitimacy,” including a change to voting rights to assuage concerns in non-euro territories where eurozone banks operate, namely the global financial center of London.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased