After Spain comes France. Paris today announced a package worth 36,9 billion euros in 2013 in spending cuts and tax increases. An "unprecedented" effort to reduce the public deficit to 3% of GDP. The project provides for higher revenues of 20 billion, between households and businesses, to which are added 4,4 billion already voted in the summer, 10 billion in cuts in state spending and 2,5 billion in reductions in health care spending.
Ma the "recovery" effect did not last long on the markets that discount the high uncertainty both on the debt crisis front and on the economic growth front, after yesterday's disappointment on US GDP and the slew of macro data. The University of Michigan Consumer Confidence Index is expected to be released this afternoon. Milan loses 1,11%, Frankfurt 0,37%, Paris 0,90% and London 0,16%. The euro recovered slightly against the dollar to 1,2922.
Investors are hoping for a move by China's central bank (where the communist party has just expelled Bo Xilai protagonist of the biggest political scandal in recent years), while on the other side of the Atlantic in recent days the governor of the Philadelfia Fed has expressed skepticism about the effectiveness of Bernanke's bazooka. In the meantime, to activate Draghi's bazooka, Spain must decide to ask for European aid. Yesterday's 40 billion plan could be a first move in this direction and some observers expect the announcement to be a matter of days away. In the meantime, the result of the stress tests on Spanish banks is expected at 18pm today. El Pais newspaper anticipated that six banks would be promoted: Santander, BBVA, Caixa, Kutxabank, Sabadell and Bankinter. An overall positive result because it reassures the solidity of some of the country's most important banks such as Santander and BBVA. But there are those who fear that Madrid needs more than the 40 billion hypothesized in recent weeks.
The Bono-bund spread has risen to 463 basis points since the opening of 449 and the Btp-bund spread is also still under tension at 375 and is affected by the Spanish moves: Investors are wondering what will happen to Italy if Spain requests European aid. The effect could also be that of an increase in pressure on our government bonds to force Italy to ask for aid too. But international investors are returning to buy BTPs and yesterday's 5- and 10-year auction closed successfully.
The EU-ECB-IMF troika is expected again in Athens this weekend and on Monday negotiations will resume with the Greek government to finalize the package of budget cuts for the two-year period 2013-2014, in exchange for the granting of the new tranche of aid to Greece for 31,5 billion euros. But there is still no date for the presentation of the Troika's final report.
Finmeccanica resists in Piazza Affari +1,86% in the wake of rumors of an acceleration of the Ansaldo Energia disposal process. Leading the Ftse Mib are Pirelli +0,54%, Diasorin +0,48% and Terna +0,48%. Among the heaviest of the Ftse Mib A2A -2,61%, Enel Green Power -2,6% and Ansaldo -1,99%.
Banks in the red on the widening of the spread with Bper -3,09%, Bpm -2,32%, Unicredit -1,49% and Intesa -1%. Today Berlin has once again reiterated that "First we need to create an independent European supervision of the banks, which is really in force, and then we can discuss a next step and a possible direct recapitalization of the banks". Meanwhile, the crackdown on Libor is starting: today the director of the FSA presented his recommendations for the reformulation of the rate that is simpler and less discretionary.
