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2010 05 15From: guardian.co.uk
French president Nicolas Sarkozy threatened to pull out of the euro unless Angela Merkel dropped her hostility to the EU´s safety net plan.
French president Nicolas Sarkozy warned of damage to Franco-German relationship if Angela Merkel opposed EU plan
Nicolas Sarkozy threatened to abandon the euro unless Angela Merkel dropped her hostility to the EU´s €750bn safety net for the single currency, sources in Brussels and European capitals said yesterday.
In a confrontation between Europe´s two most powerful politicians, the French president said he would walk out of the talks and warned of lasting damage to the Franco-German relationship unless the German chancellor backed the plans.
"It was a standup argument. He was shouting and bawling," said one official in Brussels. "It was Sarkozy on steroids," said a European diplomat. "He´s always very energetic. This time he was very emotional, too." The French leader banged his fist on the table, according to yesterday´s El País newspaper in Spain.
The showdown, late on Friday last week, kicked off a momentous week in Europe, raising fears – shared strongly in Washington and elsewhere – that the euro could collapse, wreaking untold damage on the world economy and also raising questions about the very future of the EU.
Merkel warned on Thursday that the single currency crisis triggered by Greece´s debt debacle was about much more than money. "If the euro fails, it is not only the currency that fails. Much more fails," she said. "Then Europe fails. The idea of European unity fails."
Sarkozy´s ultimatum came at a Brussels summit of leaders of the 16 countries in the single currency. It was called to rubber-stamp a €110bn rescue package for Greece, but was overtaken by events.
The financial markets were targeting Spain and Portugal and the Greek emergency had escalated into a full-blown euro crisis. After months of handwringing, the leaders had to come up with a much bigger deal to underpin the euro. By 11.30 pm, several sources said, the summit was deadlocked, with Merkel digging in against a rescue fund to which Germany would need to contribute at least €120bn.
Diplomats at the time reported that the summit was going very badly and would continue through the night.
But it ended half an hour later after Sarkozy abruptly announced he was leaving. "Sarko said: ´For me it´s over. I´m stopping this if we can´t agree,´ " said a diplomat.
Sarkozy came downstairs and staged a triumphalist press conference, announcing a radical breakthrough, an agreement that was "95% French".
Source: guardian.co.uk
2010 05 11
From: dailymail.co.uk
Goldman Sachs has admitted that it is under investigation for helping Greece to hide its vast debts.
The controversial Wall Street bank - nicknamed the Vampire Squid because its tentacles stretch far and wide - is accused of having profiteered out of a complex currency deal that helped Greece massage its finances.
In a regulatory filing in the U.S., Goldman disclosed that is 'subject to a number of investigations and reviews by various governmental and regulatory authorities in connection with its financial transactions with Greece.
The European Commission has already been probing the bank's relationship with Athens. It is unclear from the disclosure, how many other countries might be looking into its dealings with the Mediterranean state.
The Wall Street giant is claimed to have received as much as £192m in fees by entering a complex currency transaction in 2001 that helped Athens borrow cash without putting it on the books as a loan.
The so-called 'swap' deal helped Greece meet eurozone limits on government borrowing.
The arrangement was allowed under European Union rules, but is now coming under much closer scrutiny because of the financial meltdown of the Mediterranean state.
The Greek deficit stands at nearly 13 per cent of GDP and public debt is almost twice the official ceiling at 113 per cent of GDP.
Goldman Sachs was once seen as the invincible bank that could beat other firms hands down. It has always paid vast sums of cash to its employees, so it can employ the hottest talent in the financial world.
But in recent weeks, the bank's supremacy in financial markets has been placed under threat by the revelation that it is being investigated for fraud by the U.S. authorities.
America's Securities and Exchange Commission accuses Goldman of misleading its own clients and encouraging them to invest in a product that was destined to fail.
The lawsuit centres on trades set up by its sub-prime mortgage trader Fabrice Tourre, who has since been placed on 'administrative leave'.
Goldman's dealings are also being probed by the UK regulator, the Financial Services Authority.
Source: dailymail.co.uk 
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