Bank of England governor Sir Mervyn King hosts secretive summit on euro crisis
20:40 GMT, 26 May 2012
Host: Sir Mervyn King will welcome central bankers to London
London will this week host a private global summit on the world financial crisis amid mounting pressure on eurozone economies.
No agenda has been published and there will be no communique issued afterwards.
‘It is a private, off-the-record meeting,’ said a source.
In the past two days, Spain’s fourth biggest lender, Bankia, said it needed a 19 billion euros (15 billion) bailout and the prosperous region of Catalonia warned that it needed more funding from Madrid.
The yield on Spanish government bonds – the government’s likely cost of borrowing – jumped to 6.3 per cent, a figure widely regarded as unsustainable.
The summit will be dominated by central bankers including the host, Sir Mervyn King, Governor of the Bank of England. Mario Draghi, president of the European Central Bank, and Zhou Xiaochuan, governor of the People’s Bank of China, have been invited.
The eurozone is paralysed as it awaits the outcome of elections in Greece on June 17.
The left-wing Syriza party is leading in the polls and is pledged to reject austerity.Hawks led by Germany insist that Greece must stand by the cuts programme if it is to keep receiving bailout money. Greece might have to exit from the euro.
Christine Lagarde, managing director of the International Monetary Fund, also struck a uncompromising stance this weekend, saying she had little sympathy for Greeks who did not pay their taxes and said the country needed to stick to its austerity package.
Meanwhile, banknote printer De La Rue releases full-year results on Tuesday. Its shares have jumped as Greece may soon need drachmas.
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