The spread explodes again to 444 basis points and the Ftse Mib drops by 4,29% after the ECB meeting and as the European summit is about to get underway. The other European Stock Exchanges were also bad, albeit with more contained declines: the Dax dropped by 2,01%, the Cac by 2,53% and the Ftse 100 by 1,14%.
On Wall Street, the Dow Jones lost 0,98% and the Nasdaq 0,58%. The stock markets are depressed by the climate of distrust in the success of a summit that has been increasingly uphill in recent hours. The risk of Europe's explosion "has never been so great", said French President Nicolas Sarkozy at the EPP Congress in Marseille, a few hours before the Eurozone summit. Merkel, who last night spoke with US President Barack Obama, today tried to throw water on the fire: “I am firmly convinced that we can do it. We will find the right solutions,” she said.
On the other hand, already yesterday the first pessimistic voices arose from Germany about the success of an overall agreement ("some partners did not understand the seriousness of the situation" is the accusation) and Berlin confirmed its no to an increase of the resources of the State-saving Fund. Then there is Great Britain, which, even if it is not part of the euro zone, enters with a straight leg: Prime Minister David Cameron has declared that he is ready to veto if the Treaty were to damage British interests. Meanwhile, the euro fell against the dollar to 1,3325. The success of the summit on the reform of the treaties will also be fundamental for the possibility of action of the ECB which today finds itself with its hands tied.
In fact, Draghi confirmed market expectations of a 25 basis point cut in interest rates and the implementation of unconventional measures including two refinancing operations to give financial institutions unlimited liquidity for 36 months and the expansion of securities accepted as collateral.
But, of course, he was unable to make any progress regarding the possible financing of the IMF to finance in turn the countries in difficulty of the Eurozone (it is legally very complicated") and he was unable to give indications about a possible relaunch in the purchases of securities of state. But, despite the rate cut and the measures for the banks, the ECB's reduction in the eurozone's GDP estimates for 2012 weighed definitively on the mood of the stock markets: between -0,4% and +1% against the estimates from three months ago at +0,4% and 2,2%. With the lunge towards the end of the session of the first rumors on the estimates of the EBA.
EBA ASKS 15 BILLION FROM ITALIAN BANKS
According to the EBA, the European banking system will have to strengthen its capital by 114,7 billion (8 billion more than the first estimate). Italian banks need 15,4 billion euros (in October the estimate was 14,7 billion), German 13,1 billion, French 7,3 and Spanish 26,2. Banks must disclose their plans for capital strengthening by January 20. Under the tensions of the spread and the estimates of the EBA in Piazza Affari, the banks thus collapse: Mps, which needs 3,2 billion for the EBA, gives up 9,15% and Unicredit, which needs 7,9 billions (7,5 billions of the approved increase), yields 7,290%.
Intesa dropped 8,92% even if after closed markets it confirmed the adequacy of the capital for Ca' de Sass as already anticipated by the first results of a month ago. Banco Popolare (-6,15%) needs 2,7 billion and Ubi (-7,12%) 1,39 billion. Bankitalia, which reassures the Italian banking system's ability to resist, aims to agree with the EBA on the sale by Italian banks of "specific assets" in order to achieve part of the capital objectives established by the European authority.
FONDIARIA TOWARDS INCREASE?
Then Mediobanca and Fondiaria Sai dragged the price list downwards, also suffering from specific factors. Piazzetta Cuccia, the worst stock, yields 10,42% and is dragged along by the uncertainties about Fondiaria Sai of which it is a major creditor. On the insurance group (-9,64%) the fears of an increase are becoming more and more concrete after the same company yesterday, following the meeting with Isvap, declared that the plan to create a vehicle company is " currently under investigation". News could come from the next extraordinary board meeting on Monday 12.
ANALYSTS CUT FINMECCANICA
Finmeccanica dropped 9,38% after both Goldman Sachs and Bank of Amarica Merryl Lynch analysts cut the target price to 2,5 and 3 euros respectively. Furthermore, for Goldman, a recapitalization is not excluded, even if it is not the main hypothesis. Marina Grossi, wife of Guarguaglini, involved in the investigation into the Enav tenders, is said to be close to leaving the subsidiary Selex Sistemi Integrati.
