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What They Really Said: Key Soundbites From Last Night's Eurosummit

Tyler Durden's picture




 

Much has been speculated about who promised what at last night's summit, and who guaranteed that the ESM would do this, that and the other, as once again, just like last summer, the ESM is becoming the most universal Swiss army knife ever conceived (just pray it never has to be actually used). Here, courtesy of Reuters, are excerpts of what they all really said.

GERMAN CHANCELLOR ANGELA MERKEL

ON CONDITIONALITY FOR BOND-BUYING BY BAILOUT FUNDS:

"We have taken important decisions last night. First we agreed that if countries need the instruments to buy bonds on the primary or secondary market from the EFSF or ESM then the conditionality will be agreed as follows:

"The country report will be presented to the Commission on which basis we will agree a memorandum of understanding in which there will be a time-frame. The EU/IMF 'troika' will then supervise, as it is always usual in the EFSF and ESM, whether the conditions are met.

"That would be the case if Spain or Italy, with regards to their interest burden, make use of such instruments. Then this conditionality would apply, which we have agreed on precisely, according to the rules we have."

ON SPANISH SUPPORT:

"Secondly, regarding the banking recapitalisation which Spain has requested, a request will be made with the EFSF. Once the ESM becomes available, then the application will be transferred to the ESM. The seniority of the bonds will not be changed. For Spain we won't do what is otherwise applicable in the ESM regarding the preferred creditor status because the request was made through the EFSF, where such details do not apply."

EUROPEAN CENTRAL BANK PRESIDENT MARIO DRAGHI

ON THE SUMMIT RESULTS:

"It showed the long-term commitment to the euro by all member states of the euro area, and also it reached tangible results in the shorter term. The waiver of the preferred creditor status of the ESM (permanent bailout fund) for Spain is one of the results.

"The future possibility of using the ESM for direct recapitalisation of the banks which was something that the ECB had advocated for some time is also another good result.

"But we have to keep in mind that all these things should be, to be credible, should be accompanied by strict conditionality. This is essential, otherwise they will not be credible.

"Also, the Commission will present a proposal based on Article 127.6 of the Treaty for the creation of a single supervisory mechanism and within which the ECB will take up supervisory tasks for the banks of the euro zone."

Following are earlier comments by EU leaders before Friday's discussions:

FRENCH PRESIDENT FRANCOIS HOLLANDE

ON THE AGREEMENTS REACHED:

"There were three advances. The first is on the recapitalisation of the banks with banking supervision and with a calendar. The second is to allow easier solutions for Spain, which can be put into effect rapidly. And finally, there will be full use of the (bailout) instruments, the EFSF and the ESM, to give states that have made efforts the necessary protection in relation to interest rates."

ON THE IMPORTANCE OF WHAT EU LEADERS DECIDED:

"It is very important that we put into motion procedures for immediate action - something that was much hoped for. Bank supervision for a recapitalisation of the banks will take a bit more time, but this will be a lasting move in the right direction.

"We defined a vision for the euro - for economic and monetary union - saying what we will do together, and there will be greater solidarity at each step in integration. The banking union was the first illustration of this."

LITHUANIAN PRESIDENT DALIA GRYBAUSKAITE

ON IMPACT OF EURO ZONE DEAL ON SHORT-TERM BOND SUPPORT:

"We are heading for a future where we will need very general supervisory bodies to look more carefully, more strictly, and (which are) more responsible for the financial sector and banking sector, and that's where we are heading.

"I hope that in a very few weeks, the euro zone leaders will be able to find a concrete mechanism for how to control the not-very-well-behaving banks and to help them."

 

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Fri, 06/29/2012 - 07:33 | 2572621 Debtonation
Debtonation's picture

I think I'm going to go naked short some Eurobonds.  Do I have any buyers?

Fri, 06/29/2012 - 07:36 | 2572631 Doubleguns
Doubleguns's picture

Just go naked.

Fri, 06/29/2012 - 07:38 | 2572635 LULZBank
LULZBank's picture

And dont forget the lube.

Fri, 06/29/2012 - 07:34 | 2572625 LULZBank
LULZBank's picture

Where would the ESM get the "money" for the bailouts?

Fri, 06/29/2012 - 07:46 | 2572649 bigkahuna
bigkahuna's picture

bohemian grove?

Fri, 06/29/2012 - 07:48 | 2572650 Gief Gold Plox
Gief Gold Plox's picture

Thin air. Just like every other source of money.

Fri, 06/29/2012 - 07:51 | 2572661 LULZBank
LULZBank's picture

But then on second thought, lets not over complicate the issues by asking common sense questions.

The "experts" know best.

Fri, 06/29/2012 - 08:02 | 2572677 No Euros please...
No Euros please we're British's picture

ESM will get their money from:

1. A mysterious benefactor.

2. A sponsorship deal with Epson.

3. A 100% tax rate.

Delete as applicable.

Fri, 06/29/2012 - 07:37 | 2572628 Ghordius
Ghordius's picture

Note how this time the UK was a polite contributor. Cameron got the message from the Square Mile - "don't push it or we might be pushed out".

------------

"I hope that in a very few weeks, the euro zone leaders will be able to find a concrete mechanism for how to control the not-very-well-behaving banks and to help them."

If you don't behave, you'll be forced to behave. This is the fate of all banks in the eurozone.

Fri, 06/29/2012 - 07:42 | 2572640 GeneMarchbanks
GeneMarchbanks's picture

Clownish attempt at stealth nationalization. Nice for a € rip and that's about it.

Fri, 06/29/2012 - 08:05 | 2572657 Ghordius
Ghordius's picture

It's a chronic recurrence, in most of the eurozone countries. edit:

This means that the not-so-covert diplomacy is having some success, the banks of the city are starting to fear to be shut out - permanently - from the eurozone. Fear and greed, the whip and sugar of bankers...

I repeat: the City and Mr. Clegg most told Mr. Cameron in the clearest terms that he is supposed to behave, this time. The FT was brimming with instructions. This means that the UK is back on on the boat and will, for a time, row in the same direction.

And in the UK quite a lot of important people are shocked (poor muppets) by the Libor manipulations - even though they have not decided yet who is supposed to be in charge of going after this corruption. No one really wants to face the wrath that this would entail, particularly not politicians or the BoE. So in a way, an external regulator/judge, in form of an EU or even EZ bureau, could be welcome... imagine, the UK joining an european bank regulation environment so that it's a foreigner that has to clean up the mess... ironic times...

Fri, 06/29/2012 - 07:35 | 2572630 battle axe
battle axe's picture

Capt Kirk: Scotty I need more power to the printers, we have a continent to save!!! Scotty: Capt, the printers are running at %110 AND CAN NOT TAKE THE STRAIN!!! Capt Kirk: Scotty do not be such a pussy.....Print man print!!!

Fri, 06/29/2012 - 09:12 | 2572899 Vince Clortho
Vince Clortho's picture

"bust out the Di-Lithium crystals and set the printers for ludicrous speed".

 

Fri, 06/29/2012 - 07:39 | 2572636 insanelysane
insanelysane's picture

I think Germany might find itself in a very bad place.  If every EU country has an equal vote and their are more beggars than lenders, then the beggers will carry the votes to take money from the lenders.  Just like in the US where we have crossed the Rubicon, where a majority don't pay taxes.  That majority seeks to continuously increase taxes on the minority that does pay taxes,

Fri, 06/29/2012 - 07:48 | 2572651 Intelligence_In...
Intelligence_Insulter's picture

Taxes are for little people.

Fri, 06/29/2012 - 07:52 | 2572659 bigkahuna
bigkahuna's picture

yep. The beggars are running things because they can get free stuff and just charge it to our tab (the US debt). The tax payers cannot keep up with government spending, so we sucker others in to buy debt to take up the slack (or print it up when the nonfederal federal reserve buys the debt). It has turned from beggar thy neighbor to bugger thy neighbor.

Fri, 06/29/2012 - 07:55 | 2572652 falak pema
falak pema's picture

key issues in coming weeks : watch the bond spreads on Spain and Italy. See if there is collateral fall out on France Germany. And...what happens with Greece ...as Spain and Italy have been band-aided for a few weeks,maybe months...the currency war, the HF speculation galore is not over! 

Roller coaster it stays...until the next financial domino trembles. 

Fri, 06/29/2012 - 07:49 | 2572655 bmusic
bmusic's picture

And what happens when the German parliment says, "Hell Nein"?

Fri, 06/29/2012 - 08:07 | 2572685 Martin W
Martin W's picture

Monti with Mario will fix The Bundestag

Fri, 06/29/2012 - 09:09 | 2572887 Vince Clortho
Vince Clortho's picture

The printers will continue to print, regardless.

Fri, 06/29/2012 - 07:51 | 2572658 magpie
magpie's picture

UK cracked, so go long. 

Fri, 06/29/2012 - 08:04 | 2572674 jules from aus
jules from aus's picture
it seems european heads of state are attending at least one summit a week these days... 'summit' - what does this mean.. are these leaders mountaineers who courageously climb to the top of europe, from where they have the best view of all that is happening below, which enables them to see the solutions required?

rubbish.

these guys and gals are kicking around the economic can during what can only be called a nadir in european economic welfare... they are not finding solutions from one week to the next, but they are all enjoying fine first class flights, hotels and meals along the way... 'summit' - what an absolute malapropism that only fulfills one political mandate all these 'leaders' have created for themselves.. to keep on talking bull shit... that is all

Fri, 06/29/2012 - 09:07 | 2572881 Vince Clortho
Vince Clortho's picture

Summit = Dog and Pony Show for the muppets.

The real decision makers do not attend these political "summits".

It is however, a prime opportunity for the "leaders" to get together and pound down some expensive eats and drinks and order the waiters around.

Fri, 06/29/2012 - 08:23 | 2572719 Arnold Ziffel
Arnold Ziffel's picture

"I love these 7 course dinners. We should do this more often"

 

..another 'key soundbite' reuters forgot to mention...

Fri, 06/29/2012 - 08:28 | 2572735 Itch
Itch's picture

Damn, euro has a woodie! Its fiscal viagra.

Fri, 06/29/2012 - 09:38 | 2573009 slewie the pi-rat
slewie the pi-rat's picture

L0L!!!

the goldilocksCrisisTM lives up to its slewienomics billing!

there is still a slight chance that greece will get outed next week, but that is up to greece when the troika visits on monday

stahbeeeleeetaaaay!  marioEBC's "plan: was never made public or slewie and youie woulda cooked HIS nylons;  but everyone is still into the currency

angela didn't cave (YAY)

now:  either this report is accurate or a blind for bif shenanigans next week;  i'll take it @ face value;  yes the banks have been very naughty!

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