European Union Updates: Germany, Greece, Banking Union, EU Downgrade

German Coalition Government Is Formed

            I had posted earlier this month that Germany’s ruling center-right party, the Christian Democrats, were able to form a government led by Chancellor Angela Merkel, joined by the Left in a grand coalition.  Now, after the parties and the President of the Federal Republic of Germany have approved the deal, the executive has taken office. 

Developments in Greece

The conservative Greek Government ended public funding of Greece’s anti-austerity fascist party.  Greece is projected to begin its economic recovery in 2014. 

Eurozone Banking Union; Downgrade of European Union

The European Monetary Union has agreed to form a banking union, which is a key step in ending its fiscal crisis, which had been exacerbated by a lack of coordination by national central banks of interest rates.  The union will be able to rescue troubled banks, instead of relying on governments to bail them out with taxpayer-backed loans.  Meanwhile, the European Union was downgraded a notch from one of the rating firm’s highest rating.  Its rating is still excellent, but demonstrates the continued threat from the ongoing fiscal crisis.