Traders sold Italian, German, French and Spanish equities as world leaders left Cannes without delivering concrete resolutions for the eurozone - just hours before Greek prime minister George Papandreou won a crucial a vote of confidence in parliament. The PM won by 153 votes to 145, clearing the way for a new coalition government and the next tranche of EU bail-out money to be paid. The leaders said they had agreed that the International Monetary Fund (IMF) would "monitor" Italy's economy. But even this, the only significant advancement on last week's Brussels accord, failed to reassure the markets on Italy's €1.9 trillion (£1.6 trillion) public debt pile. The yield on Italy's 10-year bonds soared to 6.4pc - the highest level since the euro was launched. Analysts have warned that Europe's third-biggest economy will need a bail-out if its borrowing costs are not brought down. In Milan the stockmarket fell 2.66pc, leading the German DAX down 2.72pc and the French CAC down 2.25pc. In London, the FTSE 100 held out, closing down 0.33pc. Silvio Berlusconi insisted that both the economy and government were "solid". He said he had even turned down an offer of funding from the IMF. However, Christine Lagarde, boss of the international fund, denied that any offer of funding had been extended. The final G20 communique was derided as "flimsy" and "uninspiring". In the document, leaders said they backed Europe's "determination to bring its full resources and entire institutional capacity to bear in restoring confidence and financial stability". They reaffirmed the Brussels agreement of October 26 to bail-out Greece, recapitalise European banks and "build firewalls" around indebted countries to stem contagion. The leaders called for the "swift implementation" of the resolutions.
Access Investments-Building Awareness - European Union-ROMANIA
Saturday, November 5, 2011
Traders sold Italian, German, French and Spanish equities as world leaders left Cannes without delivering concrete resolutions for the eurozone - just hours before Greek prime minister George Papandreou won a crucial a vote of confidence in parliament. The PM won by 153 votes to 145, clearing the way for a new coalition government and the next tranche of EU bail-out money to be paid. The leaders said they had agreed that the International Monetary Fund (IMF) would "monitor" Italy's economy. But even this, the only significant advancement on last week's Brussels accord, failed to reassure the markets on Italy's €1.9 trillion (£1.6 trillion) public debt pile. The yield on Italy's 10-year bonds soared to 6.4pc - the highest level since the euro was launched. Analysts have warned that Europe's third-biggest economy will need a bail-out if its borrowing costs are not brought down. In Milan the stockmarket fell 2.66pc, leading the German DAX down 2.72pc and the French CAC down 2.25pc. In London, the FTSE 100 held out, closing down 0.33pc. Silvio Berlusconi insisted that both the economy and government were "solid". He said he had even turned down an offer of funding from the IMF. However, Christine Lagarde, boss of the international fund, denied that any offer of funding had been extended. The final G20 communique was derided as "flimsy" and "uninspiring". In the document, leaders said they backed Europe's "determination to bring its full resources and entire institutional capacity to bear in restoring confidence and financial stability". They reaffirmed the Brussels agreement of October 26 to bail-out Greece, recapitalise European banks and "build firewalls" around indebted countries to stem contagion. The leaders called for the "swift implementation" of the resolutions.
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Antonis Samaras, the leader of the New Democracy party, said in a statement: "The mask has fallen. Papandreou has rejected our proposals and he must take responsibility for that. Elections are now the only answer."
Papandreou won a nail-biting confidence vote in parliament early Saturday after vowing to start talks to form a government of national unity in the crisis-hit country.
Papandreou carried the vote, watched nervously by financial markets and fellow European leaders, despite a razor-thin majority for his socialist party and a rebellion within the ranks.
A total of 153 deputies among 298 present approved the confidence motion, the parliament speaker said to sustained applause within the chamber.
"On Saturday, I will go to the president of the Republic so we can agree on forming a consensus government and even the question of who will lead it," Papandreou said.
Oblivious to new recessionary economic realities, the heads carry on talking, banking on an economic model of growth which cannot viably exist any more as the system hits the buffers of un-sustainability in every realm. In terms of markets, the most influential person in the world is Bernanke. They hang on his every word in their anticipations and pricing in of QE3 and have no regard for Obama or the talking heads of the G20. This will be the market's last great hurrah before its own inevitable systemic collapse and no amount of QE can stop that from happening in the long run.
Can somebody just remind me please what Papa's coalition has to do with the price of fish?
It now looks more and more like George's whole referendum stunt was a ploy to smoke out Venizelos. Well, it worked.
Now what?
Not even a 60% bond haircut can save Greece. With two vote switchers, Papa will be powerless. And the Merkozy bazooka was just 'let's see if Mr Wen will lend us a bob or two'.
The true tragedy of this whole mess is the sheer global ignorance of these 'leaders' in expecting the Beijing regime to be remotely interested in junk debt...
all summed up in Mr O comments; "I've gotten a Crash course in European politics... there are a lot of institutions in Europe; there are a lot of meetings." He said it was "laborious and time consuming - but I 'think' they're going to get there".
You think eh... youv not been here long enough to know that without the ECB behind this nothing will happen and can happen. Its all about getting countries to Cut, Slash their public sectors, implement harsh austerity measures, once in place, and things get very bad then and only then will the ECB act.
Until then time is needed to create a Fiscal/Budget Union, which is unlikely and the euro will break apart leaving the northern union in place and a possible secondary Med union, otherwise its all down hill and all 'shite'.
Got a 2nd or 3rd+ home your letting out. Sell yr asset is about to crash big time!
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