(accounting) reduction in the book value of an asset
27, European leaders announced a three-part plan: an effort to recapitalize weak euro-zone banks, an increase in the size and scope of Europe’s main rescue fund, and a proposal that banks take a 50 percent write-down on their Greek bonds.
Dec. 7 Germany helped allay market jitters with a successful bond offering, as the United States Treasury Secretary Timothy F. Geithner stressed the importance of restoring confidence in the euro for growth around the world.
On Aug. 7, 2011, the European Central Bank said it would “actively implement” its bond-buying program to address “dysfunctional market segments,” a statement interpreted as a sign that it will intervene to prevent borrowing costs for Italy and Spai
the central bank of those members of the European Union who share a common currency
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund to augme
Dec. 4 Telling Italians that the fate of their country and the euro was at stake, Prime Minister Mario Monti unveiled a radical and ambitious package of spending cuts and tax increases, including deeply unpopular moves like raising the country’s re
a bond that is an IOU of the United States Treasury; considered the safest security in the investment world
Nov. 23 Germany’s stature as an island of stability amid the financial chaos of the euro zone was challenged after an auction of government bonds met slack demand, suggesting that investors are beginning to question whether there are any havens lef
the basic monetary unit of most members of the European Union (introduced in 1999); in 2002 twelve European nations (Germany, France, Belgium, Luxembourg, the Netherlands, Italy, Spain, Portugal, Ireland, Greece, Austria, Finland) adopted the euro as their basic unit of money and abandoned their traditional currencies
Dec. 7 Germany helped allay market jitters with a successful bond offering, as the United States Treasury Secretary Timothy F. Geithner stressed the importance of restoring confidence in the euro for growth around the world.
(In fact, news of the deal led Prime Minister Brian Cowen to announce that he would step down after passing a new round of budget cuts, and his party was ousted at the next election).
a government monetary authority that issues currency and regulates the supply of credit and holds the reserves of other banks and sells new issues of securities for the government
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund to augme
the percentage of a sum of money charged for its use
Interest rates soared for Italy, the continent’s third largest economy, and rose for France, whose banks hold large amounts of Italian government bonds, and where government finances are strained.
(usually plural) a social group whose members control some field of activity and who have common aims
Protests by traditional interest groups like public sector unions were joined by crowds of young people who camped out in Madrid and Athens in imitation of the Arab Spring demonstrations.
remove (water) from a boat by dipping and throwing over the side
By August 2011 European leaders found themselves scrambling once again to intervene in the markets, this time to protect Italy and Spain, two countries seen as too big to bail out.
move upwards in bubbles, as from the effect of heating; also used metaphorically
Another potential crisis bubbled up in September, as European officials angrily warned Greece that the next installment of its bailout funding would be withheld in October — a step that would lead to certain bankruptcy — unless further radical cuts
someone who commits capital in order to gain financial returns
Nov. 28 Warnings that the crisis in Europe could endanger the global economy and cause credit to dry up in the global banking system multiplied, as the O.E.C.D. sharply cut its forecasts for wealthy Western countries and Moody’s Investor Service sa
Another potential crisis bubbled up in September, as European officials angrily warned Greece that the next installment of its bailout funding would be withheld in October — a step that would lead to certain bankruptcy — unless further radical cuts in gov
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund t
a United Nations agency to promote trade by increasing the exchange stability of the major currencies
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund t
investing with borrowed money as a way to amplify potential gains (at the risk of greater losses)
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund t
Meanwhile, leaders groped for a way to expand the effective firepower of the bailout fund, the European Financial Stability Facility, amid a general agreement that the boost agreed to in July was no longer adequate to calm the market’s fears about
But its roots of the crisis go back further, beginning with a strong euro and the rock-bottom interest rates that prevailed for much of the previous decade.
the federal department that collects revenue and administers federal finances; the Treasury Department was created in 1789
Dec. 7 Germany helped allay market jitters with a successful bond offering, as the United States Treasury Secretary Timothy F. Geithner stressed the importance of restoring confidence in the euro for growth around the world.
Dec. 7 Germany helped allay market jitters with a successful bond offering, as the United States Treasury Secretary Timothy F. Geithner stressed the importance of restoring confidence in the euro for growth around the world.
It has posed great risks to many of the continent’s banks, which invested heavily in government bonds, and forced deep and painful cuts in government spending that drove up unemployment and put several countries back into deep recessions, leading a growin
Dec. 7 Germany helped allay market jitters with a successful bond offering, as the United States Treasury Secretary Timothy F. Geithner stressed the importance of restoring confidence in the euro for growth around the world.
It has posed great risks to many of the continent’s banks, which invested heavily in government bonds, and forced deep and painful cuts in government spending that drove up unemployment and put several countries back into deep recessions, leading a
cease broadcasting; get off the air; as of radio stations
And the eurozone’s members crept through the process of signing off on the July agreement, with crucial votes in favor coming from Germany and Finland, which had threatened to block it unless it got higher levels of collateral on its contribution.
Germany blocked the idea that the EFSF could function as a bank, and borrow funds from the European Central Bank as needed to stave off market panics — a backdoor arrangement for making the central bank the kind of lender of last resort that the Fe
The crisis has produced the deepest tensions within the union in memory, as Germany in particular has resisted aid to countries it sees as profligate, and has raised questions about whether the euro can survive as a multinational currency, since countries
They called for each nation in the euro zone to enshrine a “golden rule” into their national constitutions to work toward balanced budgets and debt reduction, a level of discipline well beyond the current, oft-broken commitment.
Nov. 28 Warnings that the crisis in Europe could endanger the global economy and cause credit to dry up in the global banking system multiplied, as the O.E.C.D. sharply cut its forecasts for wealthy Western countries and Moody’s Investor Service said the
a payment of part of a debt; usually paid at regular intervals
Another potential crisis bubbled up in September, as European officials angrily warned Greece that the next installment of its bailout funding would be withheld in October — a step that would lead to certain bankruptcy — unless further radical cuts
include or exclude by determining judicially or in agreement with rules
Dec. 2 As Europe’s leaders prepared for another round of talks, Chancellor Angela Merkel of Germany ruled out a rapid solution to the debt crisis, comparing the process to a marathon and saying it could take years.
Nov. 24 Quashing recent speculation of a softening in Germany’s hard-line stance on the euro, Chancellor Angela Merkel repeated her firm opposition either to bonds issued jointly by the euro zone countries or to an expansion of the role of the Euro
index based on a statistical compilation of the share prices of a number of representative stocks
Most of Europe’s main stock indexes lost ground after the data suggested that the debt and economic problems in countries like Greece and Italy were infecting the rest of the 17-country euro zone.
ancient Greece; a country of city-states (especially Athens and Sparta) that reached its peak in the fifth century BCE
Overview Since the fall of 2009, the European Union has been struggling with a slow-moving but unshakable crisis over the enormous debts faced by its weakest economies, such as Greece and Portugal, or those most battered by the global recession, li
But the dismal sale results contributed to the atmosphere of fear that prevails in Europe: that the crisis is getting ahead of the political will to solve it.
the trait of great self-denial (especially refraining from worldly pleasures)
A series of negotiations, bailouts and austerity packages have failed to stop the slide of investor confidence or to restore the growth needed to give struggling countries a way out of their debt traps.
a capital tax on property imposed by municipalities; based on the estimated value of the property
Also in September, Greece pushed through a hugely unpopular property tax increase as part of a new austerity package needed to keep installments of the first bailout package flowing.
Dec. 2 As Europe’s leaders prepared for another round of talks, Chancellor Angela Merkel of Germany ruled out a rapid solution to the debt crisis, comparing the process to a marathon and saying it could take years.
Dec. 1 Mario Draghi, the president of the European Central Bank, hinted that the bank might be willing to step up its support for the European economy — but only if political leaders take quick and decisive action to promote fiscal discipline and i
the quality or attribute of being firm and steadfast
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund t
an area or region distinguished from adjacent parts by a distinctive feature or characteristic
Dec. 5 The two primary leaders of the euro zone, Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, issued their first joint call for amendments to Europe’s governing treaties to provide better economic governance for the
to move or cause to move in a sinuous, spiral, or circular course
Under the fretful gaze of investors, the meandering approval process has revealed ever more fissures, layers of decision making and complexity in Europe that adds up to a worrisome inability to react quickly and decisively to upheaval in fast-movin
Protests by traditional interest groups like public sector unions were joined by crowds of young people who camped out in Madrid and Athens in imitation of the Arab Spring demonstrations.
Under the fretful gaze of investors, the meandering approval process has revealed ever more fissures, layers of decision making and complexity in Europe that adds up to a worrisome inability to react quickly and decisively to upheaval in fast-movin
hang (back) or fall (behind) in movement, progress, development, etc.
July Agreement Falls Behind the Curve The deal reached in late July included $157 billion in new funds for Greece and a modest reduction of its debt burden; private lenders saw their bonds rolled over into longer maturities but also had them guaran
Background The debt crisis first surfaced in Greece in October 2009, when the newly elected Socialist government of Prime Minister George A. Papandreou announced that his predecessor had disguised the size of the country’s ballooning deficit.
And the European Financial Stability Facility, the eurozone rescue fund, saw its contingency fund grow to 440 billion euros, or $632 billion, and was given new, amplified powers and the ability to use the money to bail out Portugal and Ireland if n
according to need (physicians use PRN in writing prescriptions)
Germany blocked the idea that the EFSF could function as a bank, and borrow funds from the European Central Bank as needed to stave off market panics — a backdoor arrangement for making the central bank the kind of lender of last resort that the Fe
sloping land (especially the slope beside a body of water)
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund to augme
a budget is balanced when current expenditures are equal to receipts
They called for each nation in the euro zone to enshrine a “golden rule” into their national constitutions to work toward balanced budgets and debt reduction, a level of discipline well beyond the current, oft-broken commitment.
Nov. 29 Companies large and small across the globe are feeling the strain as European banks pull back on lending in an effort to hoard capital and shore up their balance sheets.
marked by firm determination or resolution; not shakable
Overview Since the fall of 2009, the European Union has been struggling with a slow-moving but unshakable crisis over the enormous debts faced by its weakest economies, such as Greece and Portugal, or those most battered by the global recession, li
an international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members
Nov. 27 Euro zone leaders are discussing a deal among themselves to institute strict new budget rules for their countries, rather than go through the long process of amending European Union treaties.
The new euro package being negotiated by the two leaders would combine new promises of fiscal discipline; a leveraging of the current bailout fund, the European Financial Stability Facility; a tranche of money from the International Monetary Fund t
someone who lends money or gives credit in business matters
A growing number of economists called for the European Central Bank to step forward as a lender of last resort, as the Federal Reserve has done, to stop the contagion.
impaired in function; especially of a bodily system or organ
On Aug. 7, 2011, the European Central Bank said it would “actively implement” its bond-buying program to address “dysfunctional market segments,” a statement interpreted as a sign that it will intervene to prevent borrowing costs for Italy and Spai
a government policy for dealing with the budget (especially with taxation and borrowing)
Officials said a major overhaul of the way Europe conducts fiscal policy was likely to take a long time and require changes in the treaties governing the euro.
Dec. 7 Germany helped allay market jitters with a successful bond offering, as the United States Treasury Secretary Timothy F. Geithner stressed the importance of restoring confidence in the euro for growth around the world.
an incident in which an infectious disease is transmitted
A growing number of economists called for the European Central Bank to step forward as a lender of last resort, as the Federal Reserve has done, to stop the contagion.
But in the fall of 2010 interest rates began creeping up again, as countries that reduced spending to meet tough deficit targets found themselves falling farther behind, as their economies slowed and revenues declined.
(military) the relative capacity for delivering fire on a target
Meanwhile, leaders groped for a way to expand the effective firepower of the bailout fund, the European Financial Stability Facility, amid a general agreement that the boost agreed to in July was no longer adequate to calm the market’s fears about
the act of freeing from regulation (especially from governmental regulations)
In Spain and Ireland, government spending was kept under control, but easy money helped turn real-estate booms there into bubbles — a process helped in Ireland’s case by the aggressive deregulation of its banks that helped draw investment from arou
Nov. 24 Quashing recent speculation of a softening in Germany’s hard-line stance on the euro, Chancellor Angela Merkel repeated her firm opposition either to bonds issued jointly by the euro zone countries or to an expansion of the role of the Euro
Other ideas included asking the International Monetary Fund for more assistance; creating a separate fund linked to the stability fund that would be open to investors and sovereign-wealth funds from outside Europe, like the Chinese, Indians and Brazilians
physical discomfort (as mild sickness or depression)
If a large number of investors refuse to accept such a loss, then the plan loses its voluntary status and would thus become a default — creating more unease and panic in the markets.
an option that is selected automatically unless an alternative is specified
Nov. 28 Warnings that the crisis in Europe could endanger the global economy and cause credit to dry up in the global banking system multiplied, as the O.E.C.D. sharply cut its forecasts for wealthy Western countries and Moody’s Investor Service said the
The basic conflict over the shape of a new bailout plan was between Germany’s chancellor, Angela Merkel, who insisted that private banks pay part of the cost by taking losses on Greek bonds, and the European Central Bank, who opposed even a voluntary “
investor
