Current Weather
The Spy FM

S&P Warns Europe Ahead of ‘Make-Or-Break-Summit’

Filed by KOSU News in Business.
December 6, 2011

Standard & Poor’s is putting 15 eurozone countries on watch for a possible downgrade. Why now? It’s because of this week’s summit in Brussels where European leaders are expected to announce plans for closer economic integration.

S&P is basically saying whatever comes out of this little summit of yours better be good, otherwise, we are downgrading you. Here’s how they put it:

If the response of policymakers is not viewed by investors as robust, we believe market confidence could take another, possibly steep, drop downwards, meaning higher refinancing costs for banks and governments, further deceleration of credit and demand, and an even greater required fiscal consolidation effort to arrest deteriorating credit dynamics. Our CreditWatch actions signal our view of the risks to eurozone sovereign creditworthiness should the summit not generate an effective and credible response.

This week’s meeting in Brussels has been called a “make-or-break summit” and a meeting on which “the fate of Europe depends.” At the helm of this grand gathering are of course — German Chancellor Angela Merkel and French President Nicolas Sarkozy. The meeting doesn’t start until Thursday but Merkel and Sarkozy have already drafted their strategy to overcome the national debt crisis.

Here’s what Merkel and Sarkozy want to see happen:

1. Automatic penalties for governments that allow their deficit to exceed 3 percent of GDP.

2. Guarantees for private bond investors that they won’t be asked to to help pay for future bailouts. No “haircuts” as in Greece.

3. Promises from the 17 euro countries to balance their budgets.

4. No eurobonds (debt issued jointly by all eurozone member countries).

5. An earlier start date for the European Stability Mechanism. This bailout fund was supposed to replace the EFSF now there is talk of keeping of it around even after the ESM launches.

6. These changes in place by March 2012.

These proposals alone won’t solve the eurozone’s current problems — what these countries really need now is cash. Instead, the hope is that these “tougher” rules will entice investors and the European Central Bank to buy more bonds, effectively loan these countries more money. [Copyright 2011 National Public Radio]

Leave a Reply

9PM to 12AM The Night Shift

The Night Shift

All of our hosts live and breathe the lifestyle of their music genre, but none define it like David Goad, host of the Darkwave show, The Night Shift. He has a degree in guitar performance from the Academy of Contemporary Music at the University of Central Oklahoma and is the lead vocalist for two bands, Of the Tower and Kali Ra.

Listen Live Now!

12AM to 5AM The Spy

The Spy

An eclectic mix of the Spy's library of more than 10,000 songs curated by Ferris O'Brien.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center