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Complacency concerns at EU summit

Thursday, October 18, 2012 - 02:46

Oct.18 - Germany and France clash over greater European Union control of national budgets and moves towards a single banking supervisor before a summit of the bloc's leaders begins. Ciara Sutton reports.

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It's the 20th strike in Greece since the country was first bailed out two years ago. And these days a striking bus driver in Athens doesn't always have a huge impact around the globe. Some are now saying the same about European leaders' summits - this is the 22nd one in less than three years and even the German Chancellor is pessimistic. (SOUNDBITE) (German) GERMAN CHANCELLOR ANGELA MERKEL SAYING: "This will not be a Council that takes decisions. We will prepare decisions for December, but we must lay the groundwork and we will have a lot to do." Angela Merkel wants more power for the European Commission so it can veto national budgets that breach EU rules. But French President Francois Hollande is having none of it. (SOUNDBITE) (French) FRENCH PRESIDENT FRANCOIS HOLLANDE SAYING: "The topic for the Council is not the budgetary union, it's the banking union. So the only decision that we're going to take, which we're going to confirm, even, is the establishment of a banking union before the end of the year." Differences between Germany and other member states over the initiative have stalled the plans. And no substantial decisions are expected, reviving concerns about complacency creeping in. But EU Commissioner Ollie Rehn is optimistic - he says banking union, for one, is now imminent. (SOUNDBITE) (English) EU COMMISSIONER FOR ECONOMIC AND MONETARY AFFAIRS OLLIE REHN, SAYING: "If the EU members states and European Parliament work as intensively now in the coming weeks, as the European commission worked during the whole summer break, then I'm sure that this can be concluded by the end of the year." Richard Hunter from Hargreaves Lansdown says investors also seem more upbeat. (SOUNDBITE) (English) RICHARD HUNTER, HEAD OF EQUITIES AT HARGREAVES LANSDOWN SAYING: "We have been seeing some more concrete signs of advancement over the last couple of months and I think investors are starting to realise that with the euro zone being such a massive region there are a lot of i's to dot and t's to cross and they are at least making some progress." Since the ECB announced last month it was prepared to buy the bonds of struggling euro zone countries, borrowing costs have fallen sharply. On Thursday Spain again sold more debt than planned and at lower yields. But it's signs that Madrid will soon ask for aid that made that possible, adding to the dilemma. And as Greece braced for more clashes, EU and IMF negotiators headed to Brussels from Athens to brief leaders. They say a programme of cuts and reforms needed to win fresh aid has been agreed. But again, no announcement just yet, and the waiting game goes on. A verdict on Spain and other troubled states like Cyprus may now have to wait until yet another meeting, next month Ciara Sutton, Reuters.

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Complacency concerns at EU summit

Thursday, October 18, 2012 - 02:46