Guido Westerwelle, vice-Chancellor and head of the FDP Free Democrats, said there was no justification for last week’s call by Brussels for an urgent boost in the size and powers of the €440bn (£371bn) fund, writes the Telegraph.
“Only a small part of the fund has been used, so there is no need to talk about increasing it,” he said, adding that any further aid must come on stringent terms.
The FDP’s finance spokesman, Otto Solms, said the party’s parliamentary group would oppose an expansion of the fund, and warned that it must not become a “bad bank” by purchasing EMU bonds pre-emptively.
Bank urged to keep interest rates low
The Bank of England should “hold its nerve” and avoid pressure to raise interest rates, an influential economics forecaster has said.
The Ernst & Young Item Club said any increase in the bank base rate from the current historic low of 0.5% could endanger the economic recovery, writes the BBC.
The Bank should stand firm against temporary pressures such as the VAT rise, it said.
Meanwhile, Deloitte is warning of a “bumpy road to recovery”.
In its 2011 UK economic review, it said it expects GDP growth this year and next of just 1.5%.
Goldman Sachs in the firing line over predicted $15.4bn wage bill
Wall Street bank Goldman Sachs will move centre stage in the ongoing furore over bankers’ bonuses this week by setting aside an estimated $15.4bn (£9.7bn) to pay its staff for 2010, amounting to a possible average of $435,000 per employee.
Goldman, a perennial lightning rod for fury over banking excess, is likely to suffer a drop in earnings from its figure of $13.4bn a year ago, according to the consensus of analysts’ forecasts, and staff payouts will be short of its record $20.2bn distribution before the financial crisis hit in 2007.
But the amounts going to Goldman’s bankers will feed into an already frenzied debate about the morality, wisdom and justice of six- and seven-figure pay packets at the top of the finance industry, coming hot on the heels of parliamentary scrutiny of bonuses at Barclays, RBS and Lloyds.
