Germany, France, Italy, and Spain have agreed to spend 1% of GDP on new stimulus measures.
Where is the money coming from? They will not say. Most likely from somewhere else, better known as nowhere.
The Guardian reports Eurozone big four pledge 1% of GDP to underwrite banks and stimulate growth.
The leaders of the eurozone's biggest economies announced on Friday night that 1% of the European Union's GDP was to be set aside to help the continent grow its way out of the financial crisis. But doubts were immediately expressed as to what share of the package – said to be worth €130bn (£105m) – would be genuinely new money.Meaning of "Necessary"
After several hours of apparently tense discussions, there was no immediate agreement on a plan outlined by Italy's prime minister, Mario Monti, on Thursday, aimed at stabilising Europe's banks and protecting countries under attack in the markets.
"There was an agreement between all of us to use any necessary mechanism to obtain financial stability in the eurozone," said Mariano Rajoy, the Spanish prime minister, afterwards.
But the German chancellor, Angela Merkel, insisted that the EU must take full advantage of the instruments already at its disposal. Her remark suggested she is wary of two new funds – to guarantee bank depositors and as a lender of last resort to ailing banks – understood to have been on the agenda at Friday's talks.
In a sign that tempers are becoming increasingly frayed before next week's crucial summit, the normally gentlemanly Monti used his closing remarks to attack France and Germany publicly.
Nicholas Spiro, of Spiro Sovereign Strategy, said: "The pact has a shuffling of the deckchairs feel to it."
This week’s G20 communiqué dealt with the eurozone. Let us examine it closely.Real Stimulus
“Euro area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks.”
The crucial word here is “necessary”. We can safely say that agreement on what this means is altogether lacking.