No More Naked
Germany and France Call for an EU Ban on Financial Speculation
Rumors of the demise of the Franco-German partnership appear to be exaggerated. German Chancellor Angela Merkela and French President Nicolas Sarkozy have now joined forces to call for a new EU-wide ban on certain kinds of financial speculation.
There was much speculation about tensions between France and Germany after a planned bilateral summit between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Monday was postponed at very short notice, with pundits postulating that the Franco-German partnership -- the European Union's famous "motor" -- was deeply divided over how to tackle the euro crisis.
But now, perhaps with that speculation in mind, the two leaders have joined forces to push for a EU-wide ban on certain kinds of speculative financial transactions, in a reaction to recent turbulence on the markets. In a joint letter released Wednesday, Chancellor Angela Merkel and French President Nicolas Sarkozy urged the European Commission to "speed up" its work to introduce stricter controls on short-selling and credit default swaps (CDS) on sovereign bonds.
"In particular, we believe that it is indispensable to reinforce the transparency of short positions on equities and bonds, especially sovereign bonds," reads the letter, which is addressed to European Commission President Jose Manuel Barroso. "The Commission's work should encompass the possibility of an EU-wide prohibition of naked short selling of all or certain shares and sovereign bonds as well as of all or certain naked sovereign CDS," the letter continued. Merkel and Sarkozy called on the Commission to "present all possible measures for action in these areas" before the July meeting of EU finance ministers. more