Markets disappointed with the plan of Merkel and Sarkozy

Markets in the US, Asia and even Europe were disappointed with the proposals of French President Nicolas Sarkozy and German Chancellor Angela Merkel. On Tuesday evening, the two met in the Elysee Palace to discuss possible solutions to the debt crisis in the EU and how to defend the Euro. Stock exchanges reacted negatively - first to the news that Paris and Berlin would not support the idea of issuing common Eurobonds under the “one for all and all for one” scheme.

Although official sources from both delegations had said in advance that the topic would not be discussed, eventually, it was on the agenda. Sarkozy even pointed out that this was an interesting proposal, but would be discussed in the future. And the German Chancellor, said: “I believe our proposals will solve the crisis now and restore confidence step by step. I do not believe Eurobonds will help us in this endeavor”. French and Spanish markets reacted immediately with a decline.

The idea of issuing Eurobonds was supported some days ago by Spain, Italy and Ireland and even by Britain’s Chancellor of the Exchequer George Osborne said on Monday that a decision such as Eurobonds and other forms of guarantees would require serious consideration. Rejecting the idea for the introduction of common European debt securities in the near future, Sarkozy and Merkel left Eurozone vulnerable to attacks by speculators, market analysts pointed out. This was confirmed by the trade session in Asia where the leading index Nikkei 225 of the Tokyo Stock Exchange plunged.

US markets did not remain indifferent to the plan of Merkel and Sarkozy either. They were coloured in red mostly because of the two leaders’ proposal to introduce a common European tax on financial transactions in the Eurozone. The Dow Jones Industrial Average lost 0.67% and the decline was due to the weak economic growth in Germany. S&P 500 dropped by 0.97%. The Euro, in turn, also remained under pressure.

Прочети цялата новина

Свързани новини: