European Leaders Divide on Greece; IMF Shadow

123jump.com Staff
19 Mar, 2010
New York City

European leaders divide as Greece races to cut its borrowing costs. Greece Prime Minister has hoped that the support from the EU leaders will be sufficient to trim the borrowing costs but Greek bond yields trade at twice the German bonds yields.

[R]2:40 PM Frankfurt – European leaders divide as Greece races to cut its borrowing costs. Greece Prime Minister has hoped that the support from the EU leaders will be sufficient to trim the borrowing costs but Greek bond yields trade at twice the German bonds yields.[/R]

European markets and the euro traded sideways with a negative bias after leaders of the EU nations voice their opposition to a Greek bailout. Leaders of Spain, Germany and the Netherlands have expressed their lack of willingness to extend financial assistance to Greece in the last 24 hours and pointed that Greece should turn to the IMF.

French President Nicolas Sarkozy disagreed with German chancellor Angela Merkel and said the euro region should rescue of Greece is better than asking for help from the IMF.

Greek Prime Minister hoped that the pledges of support from the EU leaders will lower the cost of borrowing but the yields on 10-year Greek government bonds traded up 9 basis points to 6.43%.

The International Monetary Fund is increasingly viewed as the lender of last resort for Greece and the European Commission President Jose Barroso commented in an interview with France 24 that seeking help from the IMF is not a question of “prestige” for the EU.

The euro declined 0.4% to $1.355.

In London trading the pound declined after the prospect of the UK economy dipping into the recession increase as the job market recovery lags. Lloyds Banking Group Plc, the troubled U.K. mortgage lender said it is likely to return to profitability this year.

Europe Markets Review

In London FTSE 100 Index traded higher 42.86 or 0.76% to 5,685.48, in Paris CAC 40 Index increased 19.17 or 0.49% to 3,957.35 and in Frankfurt DAX index traded higher 16.01 or 0.27% to 6,028.32. In Zurich trading SMI increased 10.04 or 0.15% to 6,907.78.