EU Commission plans desposit insurance directive

 

FT Deutschland reports from Brussels that the European Commission plans a new directive to raise the minimum deposit insurance from €20,000 to €40,000 per bank customer as a direct result of the Northern Rock fiasco. The British are currently considering raising the ceiling to a level that would exceed this new level. The Dutch have also raised their deposit insurance to this level. This directive, if implemented, would be binding on all EU members.

 

 

 

Oil drops to below $125

Oil and commodities continued to plunge yesterday, as oil fell below $125pb and the CRB global commodities index is down 13% from its peak in early July. The latest fall has halved the index’ gain this year, according to the Financial Times. Analysts are as ever divided, but the fall seems to be related to the weakening in global demand. Some speculators, such as hedge funds have been reported to move out of commodities. But there are also analysts who are recall that there had been previous periods during which oil and commodity prices temporarily softened before bouncing back.

 

 

 

Almunia criticises Sarkozy

It does not often happen that a European Commission criticises a head of state openly, let alone the current president of the council, but this is what happened yesterday when Joaquin Almunia criticised Nicholas Sarkozy’s proposals regarding the ECB to enforce publication of minutes, and to enforce greater political co-ordination. According to El Pais, Almunia said these proposals did not go in the right direction, and would increase national pressure on the ECB.

 

 

 

Barroso wants to stay

In an interview with the Dutch newspaper NRC Handelsblad, Jose Manuel Barroso said for the first time that he wants to stay at the helm of the Commission. (We knew, of course, that he had been running a campaign to this effect for a long time. Barroso was also mentioned as a possible presidency of the Council, but with the uncertainty over the ratification of the Lisbon Treaty, he appears to go for the more certain bet.)

 

 

 

The Irish effect on Sarkozy’s presidency

Writing in FT Deutschland, Daniela Schwarzer says the Irish No totally will totally overshadow the French presidency. Sarkozy’s Dublin trip achieve no more than to do undo the damage he done the previous week. There will be no solution to the Iris crisis during October council meeting, where Brian Cowen will only present an analysis of the No vote. A decision will have to wait until December. And Christine Lagarde’s plans for EU wide tax harmonisation are also off the agenda for as long as this situation persists. A fine mess.

 

 

George Bush’s understanding of the financial crisis

Somewhat off topic for us, but here is a revealing extract of what George Bush had to say about the financial crisis (hat tip Brad DeLong)

 

"Wall Street got drunk, it got drunk, (it’s one of the reasons I asked you to turn off your tv cameras.) It got drunk and now it’s got a hangover.  The question is how long will it sober up, and not try to do all these fancy financial instruments..."

 

 

 

 

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