Putting aside the prospect of a clash with Athens, Angela Merkel has made a passionate appeal to the German public to back the Eurozone “dream.” The German chancellor today launched a bold marketing campaign with the slogan: “I want Europe”. “Europe is not just a matter of the intellect – Europe is and remains above all a matter of the heart,” she said in a video clip which launched a nationwide campaign. She added: “We have [European integration] to thank for our peace, our prosperity.” The campaign was backed by German companies, as well as celebrities, sports stars, former politicians and ordinary workers. Their clips ended with the phrase: “They know why Europe is good for us.” A raft of gloomy economic data showed why the rest of Germany needed the reminder. Manufacturing and services data showed that the powerhouse economy’s private sector shrank for the fourth month running in August, according to The Telegraph.
Royal Bank of Scotland faces an even bigger bill than Barclays to settle allegations that it attempted to manipulate Libor, according to a Labour member of the Treasury select committee. MP John Mann said he had been told by “City insiders” that RBS would have to pay out even more than the £290m Barclays was handed in fines after settling the US and British investigations into Libor-rigging. Mr Mann claimed that the Government was already aware of the scale of the fines likely to be imposed on RBS, which is 82% owned by the state. “There is an obvious Government advantage in allowing Barclays to take the full flak and letting RBS sneak in later,” he said, according to The Telegraph.
A £50 rise in monthly costs is all it would take to push one third of households to financial breaking point, according to a new study. With rising mortgage payments and utility bills, budgets are becoming so tight that millions of people would not be able to meet all their monthly bills were they bumped up by £50 or less. Of these, one in five is already finding it impossible to pay all their bills, with increasing numbers turning to debt to get them through the month, the survey by MoneySupermarket.com found. Although people are cutting back expenses where they can, 44% of adults said they have increased their use of credit over the last year to help them make it through each month. As many as 24% of those surveyed said they have relied more on credit cards and 17% have turned to authorised overdrafts to help them meet regular household outgoings. Thirteen per cent have relied on hand outs from friends and family. Household budgets have become increasingly tight as incomes remain stagnant while costs rise.
Sir Howard Davies was under pressure to step down as a director of the Prudential last night after being named chairman of Britain’s biggest insurance funds consolidator, Phoenix Group. Leading shareholders in both insurers expressed concerns about potential conflicts of interest for Sir Howard, the former chairman of the City regulator, the Financial Services Authority. “It’s like the chairman of Marks & Spencer joining the board at Booker [the cash and carry chain],” said one top Prudential investor. “I find it extraordinary that the new chairman of the Prudential [Paul Manduca] has signed off on that appointment. It is bizarre,” he said. Several of Phoenix’s most senior shareholders said that they raised concerns about potential conflicts when they were told in advance, writes The Times.
Greece will not be forced out of the single currency until after the US presidential elections at the earliest, according to senior British officials. Britain believes that any such preparations would prompt President Obama to force Europe to delay expulsion until after November 6. A report on the progress of the Greek economy by the IMF and EU officials is expected towards the end of September or early October. Any Greek exit is likely to happen over a weekend. “President Obama would bring a pretty large amount of pressure to bear on Germany if they tried to go before the elections,” a senior government source said. US officials are worried about the impact of a Greek exit across the Atlantic, and that they would not be able to focus on the inevitable turmoil it would trigger at the same time as the elections. Britain has told Germany that if Greece were to leave, Europe must increase the size of the firewalls to prevent contagion spreading to other Eurozone countries. There is speculation in Whitehall that the Eurozone may try to delay any Greek exit until after the German elections in September 2013, The Times reports.
Germany and France pressed Greece last night to continue reforms as the Greek Prime Minister warned of “a nightmare” if it were forced from the euro.Chancellor Merkel and President Hollande met in Berlin in an attempt to formulate a joint response to Greece’s request for two years more to implement austerity measures in exchange for billions of euros in bailout funds. The leaders of the Eurozone’s two largest economies will hold separate meetings today and tomorrow with Antonis Samaras as Greece faces what has been called its “last chance” to avert expulsion from the euro. Mrs Merkel said yesterday: “It is important for me that we all stick to our commitments … We will, and I will, encourage Greece to continue along its path of reform, which has demanded a lot of the Greek people,” according to The Times.