Poland: The collapse of the Eurozone could cause a war in Europe

• The European Parliament and the Polish presidency of the EU reach a compromise concerning the sanctioning of countries with fiscal problems

• Angela Merkel rejects the idea of common Eurozone bonds

If the Eurozone collapses, then we will see a war on the continent in the next ten years, Polish Finance minister Jacek Rostowski, said, according to euobserver.com.

The Polish official made this statement on Wednesday, speaking to European parliament members, and on this occasion warned that those responsible for the region need to act quickly to prevent a major threat to the EU.

"Undoubtedly, we are in danger. Europe is in danger", Rostowski said, discussing the report "The collapse of the Eurozone - Consequences", made by Swiss bank UBS. UBS warns that from a historic point of view, monetary unions do not collapse without a civil war or other authoritarian reactions.

Jacek Rostowski recounted, before the members of the Parliament, a recent conversation with "an old friend, who presently leads a major bank". The Polish minister said: "We were talking about the Eurozone crisis. He told me: < You know, after all these political and economic shocks, it would be abnormal if we were able to avoid a war in the next ten years >. A war, ladies and gentlemen. I am really thinking of getting a green card for my children in the United States".

Rostowski said that he has chosen his words carefully in this speech, and said that a potential war would not take place in the coming months or in the next four years, but within ten years, a scenario which is almost completely unimaginable at the moment.

• "Compromise package" in the European Parliament

The European parliament and the Polish presidency of the European Union (EU) yesterday reached a compromise on the strengthening of the fiscal discipline and on penalizing countries with escalating fiscal deficits.

The European Parliament announced it has concluded an agreement with the Polish presidency, and Polish Finance minister Jacek Rostowski, confirmed that "a package of compromise measures was agreed upon".

The proposals, which need to be approved by the European governments as well, will be forwarded today to the Finance Ministers meeting in Poland. The vote of the European Parliament will take place at the end of this month.

The new regulations stipulate financial sanctions in the form of deposits in blocked accounts, which would be used to levy fines if deficit rules are violated.

If the project gets approved, it will allow countries to be sanctioned before the passing the maximum limit of an annual deficit of 3% of the GDP, stipulated in the legislation of the EU.

• Merkel does not believe in "collectivizing debts"

German chancellor Angela Merkel yesterday rejected the idea of creating some common Eurozone bonds, calling it "absolutely wrong". In her opinion, the return to stability of the monetary union requires a long term approach.

Merkel said: "We need to distance ourselves from a union of debt and move towards a sustainable union, one of stability. It won"t be easy, but it is the best alternative. It can"t happen overnight, through some singular solution. We can only get there through a controlled process, step by step. The idea of Eurobonds is absolutely wrong idea. In order to have similar interest rates, we need similar competitiveness levels, and similar budget statuses. We won"t succeed in doing so by collectivizing debt".

The statements of the German chancellor came after Jose Manuel Barroso, the president of the European Commission, said that the EU executive would soon present projects for the introduction of common Eurozone bonds.

On the other hand, the German chancellor and French president Nicolas Sarkozy said, after a teleconference with the Greek PM, that they are convinced that Greece will remain in the Eurozone, as the country is accelerating its anti-crisis measures.

• Central banks will continue to collaborate in order to ensure additional liquidity in dollars

The European Central Bank (ECB), the Swiss National Bank, the Bank of Japan, the US Federal Reserve and the Bank of England will cooperate in order to provide additional liquidity in dollars, aside from the weekly auctions announced last year, the ECB said.

Liquidity will be made available to banks on October 12th, November 9th and December 7th. The maturity of the loans, which will be granted in exchange for eligible guarantees, will be of approximately three months. The interest rates will be fixed.

The announcement of this cooperation drove the prices of banks in the European banking system. On the Paris Stock Exchange, shares of "BNP Paribas" SA rose 13.5% (at 17:40 local time), and "Société Générale" rose 7%. In Italy, shares of "UniCredit" rose 6.5%.

• Japanese banks - "increasingly vigilant" in their relationship with Europe

Japanese banks have become "increasingly vigilant" in their relationship with European banks, due to worries over the region"s credit risk, said the president of "Mitsubishi UFJ Financial Group", Katsunori Nagayasu.

He said Japanese banks were being careful anyway in their relationship with European financial institutions, even under normal circumstances, but since July, the Japanese banking system has become increasingly careful in its relationships with its European partners.

• The Swiss National Bank keeps interest rates at zero

The Swiss National Bank (SNB) yesterday decided to keep the key interest rate at zero and reaffirmed its commitment to keep the exchange rate at 1.20 Swiss Francs/Euro.

"Through these measures, the Swiss National Bank has taken a stance against the acute threats to the country"s economy and against the risk of deflation, following the massive overvaluation of the Swiss Franc", the officials of the SNB said.

The decision of the bank was anticipated by analysts.