Week in Europe – EUR Road to Nowhere

This week the spotlight was on the Euro area leaders summit. Alas and not a surprise, no major announcement took place. The extension of a new or modified rescue plan for Spain and Greece respectively was not even addressed. According to Merkel, the two-day EU summit was not for decisions; it was about putting things on the right track.

Leaders and policy makers focused mostly on the creation of the infrastructure behind the bank supervisor plan, and on the implementation of the ESM’s ability to directly recapitalize banks, but without any clear policy decisions. If anything, the summit reinforces again the difference in view and priorities amongst the Euro stakeholders. Members agreed to begin the creation of a banking supervisor under the ECB.

The timing of initiation remains uncertain, but it’s earmarked to happen over the course of 2013. The plan supposedly involves the ECB directly regulating only “systemically important” institutions while local regulators supervise smaller institutions.

• Troika declares progress In Greece
• UK Sales Beat Market Expectations
• UK Unemployment Rate Falls to 7.9 Percent
• Olympics help UK Payrolls to Surge
• UK Austerity Might Have Had Adverse Effects
• Spain is offered a German Lifeline
• A look Inside the European Statistics Organization
• Bank of England Deputy Governor Fears the Worst is Still to Come
• Britain opposes ECB as head of Banking Union
• Europe Moves Towards a Single Banking Supervisor for the Euro Zone
• Merkel and France Clash on EU Budget Controls
• Spanish Banks Face More Losses
• Cyprus expects Bailout by Mid-November
• Royal Bank of Scotland Withdraws from Asset Protection Scheme
• Greece Close to Agreement as EU Summit Approaches
• IMF proposes a Spanish Italian Aid Request Package
• Germany Cuts Growth Forecast
• Spain Keeps its Investment Grade Credit Rating From Moody’s
• Euro Moves to Month-High above 1.31 on Spain Optimism Before Summit
• Greece Expects to Continue Receiving Bailout Funds
• Greece cuts unlikely to reach agreement before Mid-November
• IMF’s Lagarde: ESM and OMT need to be deployed

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