Mario Draghi of Goldman Sachs (oops the ECB), promises will do EVERYTHING to fix the Eurozone - bring out the Champagne, all is well with Europe again!
More empty promises to fix European debt problems, prop up ailing financial markets
July 26, 2012 – LONDON – British Prime Minister David Cameron Thursday underlined his government’s commitment to fixing the U.K.’s public finances, as he appealed to businesses across the world to invest in the U.K. at a conference timed to coincide with London’s hosting of the 2012 Olympic Games. Mr. Cameron said his administration will continue its efforts to rein in a large budget deficit even though official data showed Wednesday that the country’s economy contracted by 0.7% in the second quarter of the year. British Prime Minister David Cameron speaking earlier this month, “Getting our debt under control is absolutely essential for growth,” Mr. Cameron said. In the ornate rooms of Lancaster House, which stands in the shadow of Buckingham Palace, Mr. Cameron attempted to entice the 200 global business leaders, policy makers and investors attending the conference to invest in the U.K. With the eyes of the world currently on the Olympics host city, Mr. Cameron took the opportunity to burnish his government’s pro-business credentials as he looks to build an economic legacy from the sporting extravaganza. He highlighted moves to reduce red tape, cut tax rates for businesses and provide incentives to carry out research in the U.K. The prime minister also drew attention to a scheme, first announced in the March budget, aimed at encouraging the creation of new businesses by offering investors tax breaks on profits from asset sales if they plow the money back into start-ups. “We’re making our economy more competitive,’ Mr. Cameron said. Wednesday’s dire gross domestic product figure, which was much weaker than expected, has intensified the debate within the U.K. about spending cuts versus stimulus as some commentators claim that austerity is proving a major drag on growth. –WSJ
ECB promises assistance: Market sentiment had also been given a boost already on Wednesday, when ECB policymaker Ewald Nowotny suggested that Europe’s bailout fund could be given a banking license. That would give it the ability to borrow money from the ECB. Such a move would be of particular significant for Spain and Italy as the current bailoutfund does not have enough money to rescue them both. Draghi’s comments helped offset mostly gloomy news from corporate earnings. Major companies like engineering group Siemens and carmaker Volkswagen warned that the economic slowdown in Europe would hurt profits in coming quarters. That hurt stocks in the industrial and automotive sectors. -CSM
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