The emergency measures adopted by Spain and Italy "to strengthen fiscal discipline and growth will contribute to the stability of the euro area". This is the opinion of Herman Van Rompuy, president of the EU Commission, who this morning via Twitter joined the chorus of continental voices that for days has been trying to put out the speculative fire that has struck the finances of the two peripheral countries. The president said he also appreciated "the intervention of the ECB, which reactivated its Securities Markets Programme".
Furthermore, according to Van Rompuy, “close cooperation on a global level with the G7 and the G20 is very important in order to face the challenges facing both the euro area and the USA. I am heartened by the determination of the heads of state and government of the Eurozone to implement all the decisions taken at the July 21 summit as a priority, and the early reconvening of several national parliaments confirms their determination”. Furthermore, "the urgent approval, among other things, of our decisions to make the EFSF more efficient and flexible is decisive for restoring market confidence".
A few hours before Van Rompuy, a spokesman for the Commission itself, Olivier Bailly, had reiterated that Rome and Madrid "have no need for aid". Furthermore, as Olli Rehn, the European Commissioner for Economic Affairs, already argued last Friday, Bailly added that "the fundamentals of the two countries are very clear", above all considering that both "have announced further fiscal consolidation measures for 2012, 2013, and 1014” and “this should be enough to reassure the markets”.
In fact, this morning the announcement of the ECB's willingness to buy Italian and Spanish government bonds had given new impetus to the Milan and Madrid stock exchanges. A rebound that also had its effects felt on the bond market, with the spread of the two countries dropping significantly compared to Friday's closing, until it fell well below the level of 300 basis points. But then the inertia ran out and the price lists squandered all the earnings, even returning to negative territory.
At the moment both squares are hovering around parity. A highly unstable situation, which requires continuous monitoring. For this Bailly recalled that Rehn is in "daily contact" with the various countries of the euro area and regularly participated in the emergency telephone consultations between the G20 countries held over the weekend. As for the stabilization operations that the ECB is carrying out, "the Commission has complete confidence in you", concluded the spokesman.
