Italy sought European political support yesterday as its stocks and bonds gained some respite from a selloff triggered by the eurozone’s unresolved debt crisis and fears of a global economic slowdown.
Italian Economy Minister Giulio Tremonti met the chairman of eurozone finance ministers, Jean-Claude Juncker, for emergency talks after yields on Italian and Spanish 10-year bonds flirted with 14-year highs before calming a little.
They made no policy announcements after two hours of talks in Luxembourg.
“We had a long discussion of the problems the euro area is facing,” Juncker said.
Tremonti called it a “long and fruitful discussion,” but said nothing on the substance of the talks.
In Brussels, the European Commission said after EU monetary affairs chief Olli Rehn spoke to Tremonti on Tuesday evening that there had been no discussion of a bailout for Italy, which would overwhelm the bloc’s existing rescue funds.
The commission said it would issue a statement later in the day about the situation on financial markets.
“Italian and Spanish bond yields rose to their new record highs. This is a very alarming and scary thing,” Finnish Prime Minister Jyrki Katainen told public broadcaster YLE. “The whole of Europe is in a very dangerous situation.”
Italian Prime Minister Silvio Berlusconi, who has been largely silent, closeted with his lawyers over several ongoing trials, was due to address parliament later yesterday. His speeches, first to the Chamber of deputies and then the Senate, were pushed back until after Italian markets close.
Less than two weeks after leaders of the 17-nation eurozone agreed on a second bailout for Greece, Europe’s worst hit debtor, and adopted measures meant to stem contagion to larger sovereigns, the debt crisis is back with full force.
With many policymakers on holiday, there seems little prospect of immediate European policy action, although Spain said on Tuesday that the main eurozone governments had held telephone contacts on the situation in the markets.
German Economics Minister Philipp Roesler said Italy and Spain were not even discussed at Berlin’s weekly Cabinet meeting yesterday, which he chaired in place of German Chancellor Angela Merkel, who is on vacation and did not call in.
In Rome, an Italian minister said Berlusconi’s Cabinet did not discuss the crisis at its weekly meeting either.
The eurozone’s rescue fund cannot use new powers granted at last month’s summit to buy bonds in the secondary market or give states precautionary credit lines until they are approved by national parliaments in late September at the earliest.
The European Central Bank could reactivate its bond-buying program, but has been dormant for more than four months.
Italy and Spain could offer new austerity measures to try to placate the markets, but Rome has just adopted a 48 billion euro (US$68.8 billion) savings package and Madrid’s lame duck government has just called an early general election for Nov. 20.
Shares in banks exposed to eurozone sovereigns have taken a hammering and are having growing difficulty in securing commercial funding.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique