Reuters : ..."the new EU fiscal agreement states that primary budget deficits must not exceed 0.5pc of GDP over the economic cycle, while countries can be taken to the European Court of Justice if they fail to meet targets...." US stocks have opened higher as investors shrugged off a Fitch downgrade of major banks and focused on the market debut of social games giant Zynga. The Dow Jones Industrial Average rose 93.02 points (0.78pc) to 11,961.83 in early trade. The broader S&P 500 climbed 11.66 points (0.96pc) to 1,227.41, while the tech-heavy Nasdaq Composite jumped 29.48 points (1.16pc) to 2,570.49. Ratings agency S&P has revealed that five exporters are vulnerable to recession or may suffer a larger drop in GDP next year. The five are: Germany, the Netherlands, Belgium, Austria and Finland. Meanwhile, a US Treasury official has reiterated that the EU debt crisis is a serious risk to America's outlook. The official adds that the US has no intention of seeking additional funding for IMF.
Regling (in fact the designated CFO of the "United Europe") is full of opinions today since he has added that Italy's and Spain's borrowing needs are manageable and he doesn't believe they will lose market access. Regling also finds it surprising to constantly hear that only the ECB has the resources to tackle the debt crisis. Klaus Regling, chief executive of the European Financial Stability Facility, has said Greece may need €100bn for its second programme. He has also said that bank recapitalisation in the EU may total €50bn and that €600bn of uncommited funds is already available to fight the debt crisis. Will it be enough?
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A draft version of Europe's new fiscal compact is circulating this afternoon. Reuters has the details.
The pact includes a requirement that countries would not be allowed to run a primary deficit greater than 0.5% of GDP over the economic cycle. Offenders could be taken to the European Court of Justice.
The draft states that eurozone summits will take place "at least twice a year" (oh goody). It also says that deeper eurozone fiscal union "should not undermine" the wider EU single market. Not immediately clear how that would be achieved in practice.
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