Week of February 26, 2012 thru March 3, 2012

G20/MEXICO:Germany's Schaeuble:Shrt-Trm Stim Will Stunt Growth

MEXICO CITY (MNI) - Short-term stimulus measures will not allow Europe to solve its debt crisis, German Finance Minister Wolfgang Schaeuble said Saturday at a lunch speech on the sidelines of the meeting of the Group of 20 finance ministers and central bankers.

Schaeuble stressed that Europe will not be able to spend its way out of the crisis but will have to continue a slow, sometimes painful path of fiscal adjustment and economic reforms.

He conceded that austerity alone will not be sufficient to reduce debt.

"Growth is a necessary ingredient.

G20/MEXICO:US's Geithner: Europe Has More Work to be Credible

--Europe Needs More Steps on Stronger, More Credible Firewall
--US Has Unfinished Business, Worried About Cost of Political Inertia

MEXICO CITY (MNI) - U.S. Treasury Secretary Tim Geithner Saturday said actions by European policymakers have gone a long way to reducing downside risks to the global economy, but they must do more to be credible in their commitment to avoiding a "catastrophic financial failure."

Geithner, speaking just before the start of the meeting of Group of 20 finance ministers and central bankers, also acknowledged the "unfinished business" in repairing the U.S. economy and warned about the "costs of political inertia" on the long-term fiscal challenges.

G20/MEXICO: Greek Debt Swap Hailed,Need Greater Multilat Coord

--Bank of Canada's Carney Urges Immediate Policy Implementation

MEXICO CITY (MNI) - Charles Dallara, managing director of the International Institute of Finance, Saturday hailed the Greek debt swap finalized Friday as the right move to put the country on the path for economic renewal.

"I do believe this does open a new, more confident phase with dealing with the Eurozone debt problems," he said at a conference on multilateralism and international policy coordination in Mexico City. The IIF represented private creditors in the negotiations with Greece.

Finance ministers and central bankers from G20 nations are meeting in Mexico City this weekend.

G20/MEXICO:Fed's Yellen:Political Difficulties for EZ Firewall

--Don't Expect Any Breakthroughs at G20 Meeting

MEXICO CITY (MNI) - Federal Reserve Vice Chair Janet Yellen Saturday said she sees political impediments to quickly completing an emergency financing backstop for the euro area.

Yellen, who was attending the meetings of the Group of 20 deputies, ahead of the weekend meeting of finance ministers and central bankers, told Market News International she does not expect any resolution of the issue at this meeting.

Asked if European leaders appeared poised to finalize plans for the crisis financing fund, Yellen told MNI, "I don't know that they will.

Korea Cen Bank Gov Kim:Advanced Econs Don't Need More Stimulus

MEXICO CITY (MNI) - Further macroeconomic stimulus by advanced economies is probably not what is required by the global economy, Bank of Korea Gov. Kim Choong-soo said Friday.

Kim, speaking at the IIF conference taking place prior to the meeting here of G-20 finance ministers and central bank governors, called it a "challenging question" what would be needed to restore sustainable growth at a global level.

US News Events Calendar

--Meetings & Events of Interest to Subscribers



25/26-Feb -- U.S. Treasury Secretary Tim Geithner and International Monetary Fund Managing Director Christine Lagarde will be among North American officials attending the G-20 in Mexico City. Geithner holds a news conference after the meeting Sunday evening, local time.

28-Feb 1500/1000 Federal Reserve Gov.

US SEC's Paredes: Should Repropose Volcker Rule

WASHINGTON (MNI) - Reflecting divergences about the Volcker Rule that exist not just between regulators and the financial industry but also among regulators themselves, one Securities and Exchange Commissioner Friday urged regulators to start over and come up with a new proposal.

In straightforward comments during a Practising Law Institute Seminar on "The SEC Speaks in 2012," Commissioner Troy Paredes had a lot to say against the Volcker rule, reminding that he voted in favor of proposing it last October only for the sake of obtaining input from commenters.

FXWRAP: Dollar Mixed As Euro Surges, Yen Wilts

NEW YORK, Feb 24 (MNI) - The dollar was holding a mixed tone in afternoon dealings Friday, losing ground against a resurgent euro while holding solid gains over the yen.

Euro-dollar was changing hands at $1.3465 in the afternoon, in the upper reaches of the day's $1.3400-1.3486 range after beginning the session at the low.

Dollar-yen meantime was trading at Y80.90, at the upper end of the day's Y80.45-99 range after also beginning at the session low.

Afternoon dealings were at a low ebb but traders remained edgy with the euro and dollar-yen both close to their highs of the session, euro-dollar holding close off its afternoon high but dollar-yen remaining close to its best level of the day.

Bank of Mexico Gov: Crucial Europe Moves to Restore Confidence

--Absence of Confidence Reduced Growth Prospects in Advanced Economies

MEXICO CITY (MNI) - Bank of Mexico Gov. Agustin Carstens Friday urged Europe to take credible steps to restore confidence in the stability of its economy, the absence of which is hampering growth expectations.

Carstens, who will preside over the meeting of the Group of 20 finance ministers and central bankers this weekend, said traditional steps are losing their effectiveness, and lamented how apparent remedies to the European crisis are repeatedly overcome by events.

Weidmann:German GDP To Pick Up Soon;Greece Must Keep Promises

MEXICO CITY (MNI) - The Germany economy will soon start to pick up speed again, provided there is no intensification of the sovereign debt crisis, which up to now has had limited impact on the Eurozone's largest member state, European Central Bank Governing Council member Jens Weidmann said Friday.

Speaking at the IIF conference taking place prior to the meeting here of G-20 finance ministers and central bank governors, Weidmann, who heads the Bundesbank, said that Germany was doing a lot to help its partners and Greece must fulfill its commitments if there is to be further assistance.

It is wrong to criticize Germany for not making use of supposed room for fiscal maneuver, and wrong to think the crisis can be solved by dint of money alone, he said.