You are browsing the archive for France.

Eurozone crisis Updates…

8:49 am in Uncategorized by cmaukonen

Just to keep Firedogs abreast of the latest developments in the on going saga of the Eurozone economic crises, here are some links to live blogs and updates as they happen….more or less.

From The Guardians blog..

4.23pm: But now comes the backtracking.

Seems partial denial over the Merkel comments… allegedly was off the cuff at ‘private meeting’

— Steve Collins (@TradeDesk_Steve) June 26, 2012

4.13pm: Well this is pretty definitive. According to Reuters, German chancellor Angela Merkely has said at a coalition party meeting that Europe will not have shared total liability for debt as long as she lives.

4.02pm: But don’t worry. The eurozone finance ministers are due to hold another teleconference tomorrow ahead of the summit on Thursday and Friday. So that’s all right then.

4.01pm: Some nasty rumours about Spain, notably that Moody’s may soon cut the country’s credit rating to junk after last week’s downgrade.

The Telegraph seems to be down playing it a bit on their blog. It’s live but in the business section and not front page.

16.29 Chris Beauchamp at IG Index comments on today’s market movers ahead of the close:

Despite several valiant tries, markets remain stuck in a downbeat mode for a second consecutive day. Weaker figures from the US, in the shape of consumer confidence and the Richmond Fed index, combined with a lingering sense of nervousness ahead of this week’s eurozone summit. This week’s summit is the nineteenth meeting of European leaders, but it seems to be doomed to the same inglorious failure as all its predecessors. Germany once again stuck to its familiar line on the pooling of debt, saying this would require greater oversight from Brussels. After more than two years of crisis we are left with the same problem, namely that Germany won’t take on everyone else’s liabilities, while the other countries remain opposed to a reduction in their sovereignty. One wonders how long the eurozone can carry on in this fashion.

So the more conservative Telegraph is concentrating on our problems instead of Europe’s. Even with Spain’s bonds being downgraded possible to junk status and France’s oldest bank in trouble.

Interesting comparison. Enjoy the show.

Editor’s Note: Please limit how much you quote from copyright sources to about 2 paragraphs per source for ‘fair use’ purposes. -MyFDL Editor.

Whats next for the Eurozone ? With Update

3:22 pm in Uncategorized by cmaukonen

With Greece still edging toward the financial abyss despite all the political maturations.  Now Italy – as has been predicted – is now hurling toward the inevitable default. Even though Italian prime minister Silvio Berlusconi’s promise to step down.  Now Barclays says Italy is finished as well. Courtesy of Zero Hedge.

Euphoria may have returned briefly courtesy of yet another promise for a resignation that will likely not be effectuated for weeks or months, if at all, and already someone has done the math on what the events in the past several days reveal for Italy. That someone is Barcalys, the math is not pretty, and the conclusion is that “Italy is now mathematically beyond point of no return.”

Summary from Barclays Capital inst sales:

1 ) At this point, it seems Italy is now mathematically beyond point of no return
2 ) While reforms are necessary, in and of itself not be enough to prevent crisis
3 ) Reason? Simple math–growth and austerity not enough to offset cost of debt
4 ) On our ests, yields above 5.5% is inflection point where game is over
5 ) The danger:high rates reinforce stability concerns, leading to higher rates
6 ) and deeper conviction of a self sustaining credit event and eventual default
7 ) We think decisions at eurozone summit is step forward but EFSF not adequate
8 ) Time has run out–policy reforms not sufficient to break neg mkt dynamics
9 ) Investors do not have the patience to wait for austerity, growth to work
10 ) And rate of change in negatives not enuff to offset slow drip of positives
11 ) Conclusion: We think ECB needs to step up to the plate, print and buy bonds
12 ) At the moment ECB remains unwilling to be lender last resort on scale needed
13 ) But frankly will have hand forced by market given massive systemic risk

The whole report [PDF] is available here. And now Reuters is reporting that both France an Germany are talking (how seriously I don’t know) about a break up of the Eurozone to contan only them and a few others who are still financially stable.

German and French officials have discussed plans for a radical overhaul of the European Union that would involve setting up a more integrated and potentially smaller euro zone, EU sources say.

“France and Germany have had intense consultations on this issue over the last months, at all levels,” a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.

“We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don’t want to be part of the club and those who simply cannot be part,” the official said.

French President Nicolas Sarkozy gave some flavor of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe — the euro zone moving ahead more rapidly than all 27 countries in the EU — was the only model for the future.

Well mostly stable since France has not been looking too healthy lately. And now Merkel’s CDU is suggesting ways that countries could leave the Euro.

Merkel’s Christian Democratic Union party wants to make it possible for European Union members to exit the euro area, Handelsblatt reported in a preview of an article to be published tomorrow, citing unnamed participants in the discussion.

A commission within the party, that is crafting a framework to be presented at a party meeting, has proposed allowing a euro member who doesn’t want to or isn’t able to comply with the common currency rules to leave the euro region without losing membership in the EU, the newspaper said.

Which of course is sending the markets into a nose dive. Especially the financials. Oh well…easy come, easy go.  And how does one say “Turn the lights out before you leave.” in Portuguese ?

All of this will naturally throw a major monkey wrench into a lot of peoples economic policies.  For starters you can kiss goodby to any thoughts of making the Euro a reserve currency and attempting to solve our deficit problems by having the dollar devalued.   This wild ride has just begun and a lot of people will like get tossed off in the process.

Update from The Guardian:

Fears that Europe’s sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy will be too big to rescue.

Despite Silvio Berlusconi‘s announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in Europe’s third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Italian bond yields surged through the critical 7% mark, at one point hitting 7.5%, amid concern that the deteriorating situation had moved the crisis into a dangerous new phase.

In Athens talks to appoint a new prime minister to succeed George Papandreou were in deadlock, and will resume on Thursday morning. The Italian president, Giorgio Napolitano, sought to reassure the markets by promising that Berlusconi would be leaving office soon.

Angela Merkel said the situation had become “unpleasant”, and called for euro-members to accelerate plans for closer political integration.

“It is time for a breakthrough to a new Europe,” she said. “Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe.”

Looks like it’s gaining speed.