German Finance Minister Wolfgang Schäuble and U.S. counterpart Timothy Geithner said yesterday (30 July) they were confident the countries of the euro zone would implement reforms needed to overcome their sovereign debt crisis. Meanwhile, business confidence in the EU showed a serious decline in July.
After a meeting on the North Sea island of Sylt where Schäuble is vacationing, the two men issued a statement and said their countries would cooperate closely to stabilize the global and European economies.
Although Germany and the U.S. have clashed in the past over actions to counter the euro debt crisis and the global slowdown, the two men did not say how they hoped to reconcile their strategies to stabilize the global economy.
"Both expressed confidence in euro area member states' efforts to reform and move towards greater integration," said the statement.
The statement comes as the European Commission reported yesterday that business confidence in the eurozone has declined to a near three-year low in July. A loss of confidence in the services sector was the main driver of the decrease in the EU, said the EU executive, while the euro area saw the biggest declines in industry and among consumers.
Italy’s Monti calls confidence vote on spending cuts
Meanwhile Italy’s Monti called yesterday for a confidence vote in the Italian Senate to accelerate the passage of more than €4 billion in spending cuts this year.
The cuts would enable Italy to delay a planned sales tax increase and rein in its budget deficit.
Monti is staking his government's future on passage of the decree before the summer recess. He is considered certain to win as his parliamentary allies have guaranteed their support.
The new savings for this year are in addition to planned government spending cuts of €10.5 billion euros unveiled in an austerity package announced in December.
Among the measures included in the decree are reductions in state health-care expenditures and a gradual trimming of the number of public-sector workers and state managers.
Final approval is expected to come later this week in a vote in the lower house Chamber of Deputies.
ECB to intervene?
Italy’s premier is due to travel to Paris, Madrid and Helsinki, before the ECB meets on Thursday, EurActiv Italia reports.
The ECB is under intense pressure from within and outside the euro zone to intervene and bring governments' soaring borrowing costs under control as the debt crisis deepens and increasingly poses a risk to the global economy.
In his boldest comments to date, ECB president Mario Draghi said last week that, within its mandate, the ECB was ready to do whatever it takes to preserve the euro, fuelling expectation the bank could revive its bond purchase program as it did a year ago when it started buying the government debt of Spain and Italy.