Financial markets in Europe, Asia and the United States yesterday rallied on the decision by euro-zone leaders to relax aid rules for shoring up banks and to create a single supervisory body that will oversee the bloc's stricken lenders.
The 17 leaders, who were meeting in Brussels for the 20th time since the financial crisis hit the single-currency bloc in 2010, agreed that its rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
However, the most crucial measure the leaders agreed on during their 14-hour meeting was the creation of a single supervisory body for euro-zone banks.
To come under the umbrella of the European Central Bank, the body will begin operations at the end of the year, which is much faster than previously expected.
David Kuo, the director of The Motley Fool, a London-based investing website, said the creation of the supervisory body would shift the responsibility of repaying debts to the banks.
“By allowing banks to borrow directly from the emergency funds, the responsibility for repaying the debts has shifted from the sovereign state onto the banks,” Mr Kuo said.
“Consequently, the single supervisory body is Germany’s only means to have adequate checks and balances on Europe’s banks.
“Addressing the banking problem is as crucial as addressing the structural deficit within the euro zone. The banks are key drivers of growth through the allocation of funds. But without funds readily at their disposal they can’t lend.”
Once it is operational, the euro zone’s future permanent bailout fund, the European Stability Mechanism, would be able to recapitalise banks directly without increasing a country’s budget deficit and without preferential seniority status, Reuters reported.
Markets in Europe rose sharp- ly on the news, with the Euro STOXX 50, comprising 50 Euro- pean blue-chip stocks, surging 4.96 per cent and Germany’s DAX Index soaring 4.33 per cent. Lon- don’s FTSE100 closed up 1.42 per cent.
In Asia, Hong Kong’s Hang Seng Index rose 2.19 per cent and Japan’s Nikkei ended the day up 1.5 per cent.
US markets also moved into positive territory, with the S&P500 up 2 per cent in early afternoon trading.
The measures represent a major concession by the German chancellor, Angela Merkel, who had insisted in the run-up to yesterday’s crunch summit that aid go directly to states and only under strict conditions.
But calls have steadily mounted on her to take a more flexible approach.
Both Italy and Spain are seen as “too big to fail”, giving the leaders of these countries, Mario Monti and Mariano Rajoy, added leverage in the talks.
Mr Monti and Mr Rajoy refused to sign off on a €120 billion (Dh553.6bn) growth package until Germany approved short-term measures to ease their cost of credit, delaying the talks by several hours.
Ireland hailed the decisions as a “game changer”. However, many of the details remain to be worked out and leaders appeared at odds over just how strict the conditions attached to any assistance should be.
“The summit result offers no ‘silver bullet’ to solve the euro crisis once and for all,” Holger Schmieding of Berenberg Bank said. “It is another attempt to buy some extra time for the underlying fiscal repair and structural reforms to show results. All in all, there is some progress.”
fglover@thenational.ae
* With Reuters
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
TICKETS
For tickets for the two-day Maharlika Pilipinas Basketball League (MPBL) event, entitled Dubai Invasion 2019, on September 27 and 28 go to www.meraticket.com.
Quick%20facts
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Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Match info
Australia 580
Pakistan 240 and 335
Result: Australia win by an innings and five runs
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
Company%20Profile
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
'My Son'
Director: Christian Carion
Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis
Rating: 2/5
ACL Elite (West) - fixtures
Monday, Sept 30
Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)
Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Graduated from the American University of Sharjah
She is the eldest of three brothers and two sisters
Has helped solve 15 cases of electric shocks
Enjoys travelling, reading and horse riding
The%20specs
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Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Squads
India (for first three ODIs) Kohli (capt), Rohit, Rahul, Pandey, Jadhav, Rahane, Dhoni, Pandya, Axar, Kuldeep, Chahal, Bumrah, Bhuvneshwar, Umesh, Shami.
Australia Smith (capt), Warner, Agar, Cartwright, Coulter-Nile, Cummins, Faulkner, Finch, Head, Maxwell, Richardson, Stoinis, Wade, Zampa.
