Euro-area leaders agreed to relax
conditions on emergency loans for Spanish banks and possible
help for Italy as an outflanked German Chancellor Angela Merkel
gave in on expanded steps to stem the debt crisis.
After 13 1/2 hours of talks ending at 4:30 a.m. in Brussels today, chiefs of the 17 euro countries dropped the requirement that taxpayers get preferred creditor status on aid to Spain’s blighted banks and opened the way to recapitalizing lenders directly with bailout funds once Europe sets up a single banking supervisor. Stocks and bonds in Spain and Italy rallied and the euro posted its biggest gain this year.
The politicians struggled for consensus on reducing market pressure, where surging borrowing costs in Spain and Italy stoked concern among investors and global policy makers that the currency union threatened to splinter and risk damaging the global economy. Euro governments can now gain access to rescue loans without relinquishing control of their economies.
“We agreed on short-term measures that should apply to Spain and Italy,” said Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro finance ministers. “We will keep all options open to do the interventions that need to be done to calm the situation. There is a whole array of possible interventions and measures.”
Read more: http://www.bloomberg.com/news/2012-06-29/eu-leaders-ease-debt-crisis-rules-for-spain-as-merkel-retreats.html
After 13 1/2 hours of talks ending at 4:30 a.m. in Brussels today, chiefs of the 17 euro countries dropped the requirement that taxpayers get preferred creditor status on aid to Spain’s blighted banks and opened the way to recapitalizing lenders directly with bailout funds once Europe sets up a single banking supervisor. Stocks and bonds in Spain and Italy rallied and the euro posted its biggest gain this year.
The politicians struggled for consensus on reducing market pressure, where surging borrowing costs in Spain and Italy stoked concern among investors and global policy makers that the currency union threatened to splinter and risk damaging the global economy. Euro governments can now gain access to rescue loans without relinquishing control of their economies.
“We agreed on short-term measures that should apply to Spain and Italy,” said Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro finance ministers. “We will keep all options open to do the interventions that need to be done to calm the situation. There is a whole array of possible interventions and measures.”
Read more: http://www.bloomberg.com/news/2012-06-29/eu-leaders-ease-debt-crisis-rules-for-spain-as-merkel-retreats.html
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