Printer Friendly


Greece: Only 2-3 billion left to find with troika: Late on 19 September, Greece and the troika - EU, European Central Bank (ECB) and International Monetary Fund (IMF) - had narrowed down negotiations to budget cuts of 2 billion to 3 billion, a senior Finance Ministry official said. Following yet another meeting between Finance Minister Yannis Stournaras and the three representatives of the country's lenders, a source said that the troika has accepted Greek measures presented by the ministry 'worth 8.5 billion to 9.5 billion' out of 11.5 billion savings that Greece has agreed to identify and push through. Greece is fighting hard against IMF pressure for new pay cuts - with the IMF keen to put the new savings plan to bed as quickly as possible.

Spain: Bond auction successful, ten-year rate drops: Spain borrowed 4.799 billion in bond auctions on 20 September, paying sharply reduced interest rates for the critical long maturity of ten years, which is considered to be the barometer of investor confidence, the Bank of Spain announced. Spain, which is under pressure from the market and some of its European partners to ask for a financial bailout, placed its ten-year bonds at an average rate of 5.666% - down from 6.647% at the last such auction, on 2 August.

Portugal: Government reassures creditors but angers population: Portugal, which is under a bailout programme, conducted, on 19 September, a 'successful' treasury bill auction - a sign of investor confidence. Meanwhile, the government's austerity policy is subject to unprecedented domestic criticism. The bill sale raised 2 billion - 250 million more than the planned amount - at sharply lower interest rates. Moreover, for the second time since it obtained, in May 2011, an international loan of 78 billion, Lisbon managed to auction bonds with 18-month maturity - meaning they will reach their maturity after September 2013, the date planned by the government to return onto the long-term debt market. This renewed investor confidence follows a troika decision (EU-ECB-IMF) - representing Portugal's lenders - to extend the country's deadline to meet its deficit reduction commitments. This leniency follows Prime Minister Pedro Passos Coelho's announcement of increased austerity measures in 2013, with in particular a 7% rise in employee welfare contributions, equivalent annually to the loss of one month's pay. The population reacted immediately, culminating on 15 September in massive demonstrations in Lisbon and 30 cities across Portugal, with hundreds of thousands of people turning out to protest - the figure quoted by organisers being one million. The country's main union, CGTP, has called for further mobilisation, on 29 September in Lisbon.

Contraction in activity strongly increases in September: Unexpectedly, private sector business activity in the eurozone hit its strongest contraction in three years, a further indication that the region is likely to fall back into recession in spite of the respite noted on the financial markets. 'We had hoped that the news regarding the ECB's intervention to alleviate the debt crisis would have lifted business confidence, but instead sentiment appears to have taken a turn for the worse,' said Chris Williamson, chief economist at Markit, which releases the Purchasing Managers Index (PMI). The PMI came in at 45.9 points in September, down from 46.3 in August, according to a preliminary estimate, released on 20 September. This is the biggest contraction in activity since June 2009. Analysts were expecting contraction in activity to slow down and were banking on a flash' PMI of 46.6 points.
COPYRIGHT 2012 Europolitics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2012 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:European Report
Geographic Code:4E
Date:Sep 21, 2012

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters