BERLIN'S PESSIMISM ABOUT THE SUMMIT SLOWS THE EXCHANGES
THE SPREAD RISES TO 397 AGAIN
Pass the new thrusts of Sarkozy on Eurobonds: "They are the idea of those who have no ideas," said the French president in the afternoon. On the other hand, already two days ago the Merkozy couple had reiterated that "they are in no way a solution to the crisis", a no which for some left the door open to greater interventionism by the ECB. Pass the merciless judgment of the New York Times which rejects the Franco-German plan, which may ensure temporary stability but is destined to aggravate Europe's fundamental problem, namely the lack of growth.
But the Stock Exchanges, which all turned negative in the afternoon after a lively start, could not ignore yet another no from Berlin, which competes with S&P for the timing of its statements. According to press leaks, Germany would be against adding the financing capacity of the EFSF state-saving fund to that of the permanent ESM fund. A German government source would have said he was "more pessimistic" than last week on a possible overall agreement at the European summit. “The discussions of the past few days show that some partners have not understood the seriousness of the situation,” the source commented. German government spokesman Steffen Seibert declared shortly after in the press conference: Berlin and Paris have agreed to speed up the entry into force of the ESM, to give a strong signal to the markets at the next summit in Brussels, but the ceiling established resources available to the sava-state fund will not be affected.
A line of rigor that Germany carries on solidly. On the other hand, this morning Merkel collected another point in her favor: after the November flop on the placement of bunds which forced the Bundesbank to intervene to rake up unsold bonds, today the 5-year auction recorded a boom of requests for 8,67 billion against the 5 available. All this despite yesterday's warning from S&P which for the first time questioned the German triple A and certainly not attractive 1,11% yields. The tabloids Bild then reported that Germany has cut its new debt for 2011 more than expected, which should remain below 20 billion thanks above all to an unexpected increase in tax revenues, the growth in the number of employed people and the drop in rates on government bonds.
All European lists thus turned negative: the Ftse Mib leads the declines with a drop of 2,57% while the spread started to rise again, returning to touch 397 basis points, the declines of all banks weigh on Milan to which they return sales in the afternoon, while among industrialists Fiat (-3,81%) and Ansaldo Sts (-5,67%) suffer. Spotlights also on Fondiaria Sai on the day of the exit from the Ftse Mib to make room for Ferragomo and the meeting of the top management with Isvap. The Dax was also bad, losing 1,60%, the Cac -1,25% and the Ftse 100 -0,89%. Wall Street was also in the red: the Dow Jones lost 0,65% and the Nasdaq 1%. The euro is down against the dollar at 1,3379.
