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Eurozone is running out of options and time

Two years after eurozone began its downward financial spiral, the European Central Bank is about to unveil a widely-anticipated plan to pump more money into the system to stem a wider collapse. But the plan, similar to the massive bond-buying undertaken by U.S. central bankers four years ago, may be too little, too late. “It’s going to take a lot more than a few rate cuts here and there to give us a lift,” said Peter Dixon, a senior economist at Commerzbank Securities. “Monetary policy is effectively running out of options.”

 

Switzerland on Brink of Recession

The Swiss economy has long appeared to be surprisingly resilient to the economic downturn across Europe, but the latest statistics released Tuesday showed that Switzerland is slowing down together with the rest of Europe. After a strong first quarter, the economy contracted in the second because of falling exports to the euro zone, the Alpine country's biggest trade partner. Compared with a year earlier, the Swiss economy still managed to expand at a 0.5% pace, but it contracted 0.1% from the first quarter.

 

Spanish Job Losses Stabilize

Spanish jobless claims rose at the slowest pace in six years in August, the country's labor ministry said, a sign that surging unemployment in the euro zone's fourth-largest economy is leveling off.

 

Merkel tries to calm storms over Greece, ECB policy

Angela Merkel tried to calm a growing storm over euro zone crisis strategy on Sunday after the Bundesbank likened ECB bond-buying plans to a dangerous drug and a conservative ally of the German leader said Greece should leave the currency bloc by next year.

 

Merkel offers Greek PM no extra time on bailout

Greece Bailout

Angela Merkel reassured Greek Prime Minister Antonis Samaras on Friday that she wanted his country to stay in the euro zone, but gave no sign of ceding to his pleas for more time to meet the tough terms of Athens' international bailout.

 

Budget breather for Greece would spur economic recovery: report

Greece Bailout

Finance ministry officials in Greece have calculated that the debt-stricken country's economy will recover faster and its debt be more sustainable if it is given two more years to reduce its budget deficit, a Greek newspaper reported on Saturday.

 

Euro Watch: More Signs of Aid to Spain From Euro Partners

Euro Support

At the start of another critical week for the euro, the head of the finance ministers that use the currency, Jean-Claude Juncker, reinforced expectations Monday of an initiative to lower Spain’s borrowing costs, which had hit alarming heights.

 

Greek leaders agree most cuts, lenders stay on: source

Greece Bailout

Political leaders in Greece have agreed on most of the austerity measures demanded by its creditors and are now eyeing pension and wage cuts to find the final 1.5 billion euros of savings still needed, a source close to the talks said on Sunday.

 

Spain discussed $366 billion bailout with Germany - source

Spain Bailout

Spain has for the first time conceded it might need a full EU/IMF bailout worth 300 billion euros ($366 billion) if its borrowing costs remain unsustainably high, a euro zone official said.

 

E.C.B. President Talks Up the Euro, and Lifts Stocks

Euro

Markets and the euro rose after Mario Draghi reportedly told a conference in London that the central bank would “do whatever it takes to preserve” the currency.

 

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