EU urges US to join in action against speculators - by Aofi White

European officials urged the U.S. to join in a crackdown on speculators who bet against Europe's currency union, warning they might ban some credit default swaps — opaque financial instruments blamed for worsening the world financial crisis.

German Chancellor Angela Merkel said Tuesday that "quick action is needed," calling on the U.S. to "make a gesture" and curb the trades. Greek Prime Minister George Papandreou, in Washington, DC to meet with President Barack Obama, is also calling for curbs on speculation which he blames for making his country's debt crisis worse.

The European Commission threatened to ban "purely speculative naked sales on credit default swaps of sovereign debt" and said it would ask for a similar move globally at the Group of 20 summit of leading and emerging economies in June. Papandreou on Monday compared the practice of selling naked credit default swaps to buying insurance on a neighbor's house and then burning it down to collect.

Note EU-Digest: when is the EU Commission finally going to realize that talking about the issue to the US makes no more sense, because the US has basically caved in to accepting the financial industry and Wall Street's financial manipulations. Instead the EU needs to act immediately and unilaterally ban "purely speculative naked sales on credit default swaps of sovereign debt".

For more: The Associated Press: EU urges US to join in action against speculators