EU Finance Ministers Face Challenges in Reaching Agreement

(아주경제 이은주 인턴기자)The European Union finance ministers‘ meeting will be held on July 9th to discuss about the bailout program for financially troubled European states and to devise a plan to fight the economic crisis. However, with rising voices of opposition from different countries, the meeting seems to be far from achieving concord.

According to the New York FOREX, the Euro hit as low as $1.2258 last June. Moreover, Spain’s 10 year treasury bond interest rate increased by 25bp at a value of 6.98%, close to the Maginot line of 7.0%. Despite last month‘s Euro summit, many were disappointed at the lack of solutions provided by the senior euro-zone financial officers.

The plan to create a single supervising bank system in Europe - which would facilitate financing Spain - will take few more months than expected as the system is still under development. One official stated that Spanish banks may have to wait until next year’s first quarter to receive their bailout fund. Last week, senior euro-zone financial officials agreed to grant more supervising rights to the European Central Bank (ECB), but no further details were announced. Furthermore, Netherlands and Finland opposed against unconditional funding system such as the European Stability Mechanism (ESM), and Germany argued that recipient countries must satisfy a strict set of criteria in order to qualify for a bailout fund. Receiving financial support is becoming more challenging for European states, and the prospect of finding an overarching solution seems difficult at the upcoming EU meeting.