France, Belgium back combining Europe's rescue funds: source

PARIS (Reuters) - France has Belgium's support for combining Europe's rescue funds in the face of German opposition, a source close to the French presidency said on Friday.

Germany and France say debt talks advancing

BERLIN - German Chancellor Angela Merkel and French President Nicolas Sarkozy pushed Monday to speed up Europe's efforts to control the two-year governmental debt crisis.

Euro "Stability Union" could be achieved fast: Schaeuble

BERLIN (Reuters) - Euro zone countries could create a Stability Union to secure deeper fiscal integration relatively quickly, German Finance Minister Wolfgang Schaeuble said on Sunday.

Exclusive: Euro zone may drop bondholder losses from ESM bailout

BRUSSELS (Reuters) - Euro zone states may ditch plans to impose losses on private bondholders should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.

Italy Agrees to Allow I.M.F. to Monitor Its Progress on Debt

Acceding to pressure from European leaders, Italy “invited” the International Monetary Fund to look over its shoulder to ensure that Rome is carrying out reforms devised to keep the country from succumbing to Europe’s widening sovereign debt crisis, European Union officials said Friday.In an extraordinary move, Italy said it had offered to allow the fund to scrutinize its books every three months to make sure a $75 billion austerity package is carried out according to plan.

Greece Activates Bank Rescue Fund to Create New Proton Bank

Oct. 10 (Bloomberg) -- Greece's central bank activated a rescue fund set up under an EU-led bailout in May 2010 to restructure Proton Bank SA, with the Hellenic Financial Stability Fund becoming its sole shareholder.

Athens-based Proton will reorganize into a new lender called New Proton Bank which will have a 10.6 percent capital adequacy ratio, according to an e-mailed statement from the Greek Finance Ministry today. A separate Bank of Greece statement said the capital adequacy was well above regulatory thresholds.

Global Markets Move, but Merkel Won't

Never say that euro-zone countries can't agree on anything. A consensus is rapidly forming: Germany should transfer to its euroland partners more of its hard-earned money, either by lending its impeccable credit to an issue of euro bonds, or contributing more to a much-enlarged European Financial Stability Facility.

This weekend, Belgium's finance minister, Didier Reynders, added his voice to the crowd demanding access to Germany's wealth. No surprise there: Belgium ranks third, right behind Greece and Italy, in the size of its debt relative to the size of its economy. True, it has a way to go before its almost 100% debt: GDP ratio catches up to Greece's (about 150%) and Italy's (about 120%), but its 10-year bonds now yield approximately twice the premium over German bunds that investors extract from France, and Moody's Analytics steadily upgrades the probability of a Belgium default.

International Monetary Fund director Dominique Strauss-Kahn calls for new world currency

Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and protect against future financial instability.

“Global imbalances are back, with issues that worried us before the crisis - large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves - on the front burner once again,” Strauss-Kahn said. “Left unresolved, these problems could even sow the seeds of the next crisis.”