Awesome great news from citi:
1647 GMT [Dow Jones] CitiFx says the key result of the actions in Europe are that credit risks associated with holding the debt of the periphery of Europe are no longer what they were last week. " bottom line is that if you held Greek paper last week you were exposed to the risk of a Greek default. Now your exposure is to Europe, as that Greek paper is effectively backed by the other governments of the Eurozone," it says. "This is a major step towards getting to the heart of the problem in Europe...a single European bond market," Citi says. If successful, it will be a major part of strengthening EUR as a serious global reserve currency, it adds. (don.curren@dowjones.com)
The Spanish economy, for all its troubles, came out of the recession last quarter, according to the Bank of Spain (PDF), with the country’s gross domestic product posting growth of 0.1 percent on the previous quarter and ending an 18-month contraction, shrinking 3.6 percent last year.
Spain needed some good news, after announcing last week that unemployment figures had surpassed 20 percent. But the bank report highlighted the fragility of the recovery, saying the impact of certain stimulus measures — like those encouraging household spending — was diminishing.
The figures were released a day after Jean-Claude Trichet, head of the European Central Bank, met his fellow bank governors in Lisbon. The countries of the Iberian peninsula have caused significant worry — alongside Greece — because of their debt burdens and slow growth.
While all members of the euro zone have to address their economic prospects together, “Portugal and Greece are not in the same boat,” Mr. Trichet said at a press conference.
He added that the longer the government postponed decisive measures, the greater the risks it would run — but he denied that Greece (and by extension any other euro zone member), would default, a certainty that is not held by the markets. (Mr. Trichet also gave a speech at the University of Lisbon, outlining his vision for the role of finance, that bugbear, in the real economy.)
Portugal’s troubles are large enough to lead its most important daily, Diario de Noticias, to interview two former finance ministers about the possibility and consequences of leaving the euro (the answers were “small,” and “huge,” respectively). The ex-ministers evoked a bankruptcy similar to Iceland’s, if the country exited the single currency.
While Lisbon wants to count on growth to end all doubts about its credit quality, Peter Boone and Simon Johnson, who write for the Times’s Economix blog as well as their own Web site, The Baseline Scenario, argue that Portugal should restructure its borrowings preemptively, rather than go through the tumult of a Greeklike scenario, which you might call, well, a fate worse than debt.
Go to Statement from Bank of Spain (PDF) »
Go to Item from The Baseline Scenario »
Go to Article from Diario de Noticias (in Portuguese) »
Go to Related Article from The New York Times »
0 comentários:
Enviar um comentário