World Bulletin/News Desk
German Chancellor Angela Merkel warned on Monday against rushing to create a new pan-European bank supervisor under the roof of the ECB, saying it was more important to put a credible watchdog in place than to meet Europe's self-imposed January deadline.
Speaking at her traditional summer news conference in Berlin, delayed this year to allow the Constitutional Court to rule first on Europe's new rescue fund, Merkel also voiced support for European Central Bank (ECB) President Mario Draghi's decision to buy the bonds of stricken euro states.
Draghi's move, the Karlsruhe court ruling in favour of the bailout fund and a strong showing by pro-euro parties in a Dutch election last week have combined to cheer markets, pushing the euro to a four-month peak against the dollar.
Merkel appeared calm and confident during the hour-and-a-half briefing, at which German and international journalists lobbed questions at her about the euro crisis, her re-election hopes, Muslim protests, Iran, Syria and energy policy.
The 58-year-old German leader offered a robust defence of her Finance Minister Wolfgang Schaeuble, who at a meeting with his European counterparts in Cyprus over the weekend played down expectations that a new bank supervisory body would be up and running by the start of 2013.
"It is not a matter of coming up with something as soon as possible which will also end up not working, but of winning back credibility," Merkel told reporters.
She said it was "pretty unlikely" that the body would be operational by January 1, saying it was better to go "a bit slower" to ensure a regulator of high quality.
Merkel also dismissed the notion that struggling banks might be able to tap the euro zone's new rescue fund, the European Stability Mechanism (ESM), for direct aid before the new supervisor was up and running.
The creation of a pan-European banks watchdog needs to be approved by the EU's 27 member states. It aims to break the link between struggling banks and indebted governments, an interdependence that has exacerbated the three-year-old euro crisis, hitting Spain and Ireland particularly hard.
Although Germany was a driving force behind the idea at an EU summit last June, it has warned since then about overburdening the ECB with new tasks too soon.
For example, Berlin is resisting plans by the European Commission to give the ECB responsibility for monitoring all 6,000 banks in the bloc, in part because it wants to retain primary oversight for German regional and cooperative banks.
Merkel also touched on criticisms of Draghi's bond-buying programme by Bundesbank President Jens Weidmann, saying her former economic adviser had a right to express his opinions on crisis strategy.
Finance Minister Schaeuble, in what was seen as a direct dig at Weidmann, told a German newspaper at the weekend that the public debate over the bond-buying plan risked damaging confidence in the ECB.
Merkel has had to walk a fine line, simultaneously defending Weidmann, whose criticisms are shared by many Germans, and supporting Draghi's policies, which have calmed markets and boosted confidence that the crisis can be resolved.
She told the news conference on Monday that she had no reason to believe the ECB was violating its mandate by buying bonds, a step Weidmann has said breaks a taboo on state financing.
"If the ECB determines that monetary transmission has become difficult, then it must take measures to ensure price stability - it is not up to us to set it limits," Merkel said.
"The German government has made clear it believes that monetary stability issues justify the ECB's latest decisions."
Merkel dismissed suggestions from the leader of her Bavarian sister party, the Christian Social Union (CSU), that a 190 billion euro cap on Germany's contribution to the ESM should also apply to its share of ECB bond buys. The chancellor said there was no link between the two.
Oil market watchers are divided on the outcome of OPEC's meeting in the Austrian capital. Predictions range from a large production cut to revive prices, to a small reduction, or none at all
The proliferation of smugglers' routes into Bolivia shows how difficult it is to eradicate illegal mining without better coordination across frontiers.
Falling crude prices are fueled by slowing global growth and increased supply.
Ukraine's leading banks said most of their loans to Crimean individuals and businesses were now delinquent.
Deputy Energy Minister Jaime Himende said that "Mozambique has great hydroelectricity potential, and recently they have taken some bold steps to use renewable resources efficiently"
Obama, who hosted Modi in Washington in September, will in January become the first U.S. president to visit India twice, completing a remarkable warming in the relationship
The combined damage inflicted on Russia's economy by Western sanctions and falling oil prices totals about $140 billion.
PM Mahlab said that Egypt eyes sustainable growth to improve the living conditions of Egyptians, noting that the Egyptian economy is currently recovering.
The French economist calls for redistribution of global wealth, which he says is too concentrated in the hands of the few.
Bank cites high financing costs and financing difficulties as challenges that need to be addressed to sustain growth.
Smuggling is denying Tanzania some 80 percent of receipts accrued from the precious gemstone
The Africa initiative will create "one huge free-trade union" allowing foreign investors in Egypt to more easily reach 260 million consumers from South Africa to Ethiopia.
Budapest says the collapse of the rival Western-backed Nabucco project to bring gas from Azerbaijan to Europe, and stalled plans to build inter-connector pipelines within eastern Europe, have left it with no alternative.
In Russia, the idea of a Saudi-U.S. plot against Moscow has become common currency as the economy struggles under the effects of low oil prices and Western sanctions imposed
Lithuania's new LNG terminal represents an end to Russia's gas monopoly in Lithuania, says Lithuania's president
The minister said the militants considered the eastern Syrian cities "safe for them" and thus transferred wheat and barley in Nineveh "to preserve it".