Greece, IMF, ECB, Germany, France Haggle

Mayank Mehta
19 Mar, 2010
New York City

European markets and the euro declined as Greece and European leaders struggle to structure the bailout. Increasingly, the International Monetary Fund is viewed as a lender of last resort. Greek unemployment surged above 10%. Pfleiderer AG 2009 sales dropped 21%.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets and the euro declined as Greece and European leaders struggle to structure the bailout. Increasingly, the International Monetary Fund is viewed as a lender of last resort. Greek unemployment surged above 10%. Pfleiderer AG 2009 sales dropped 21%.[/R]

European markets and the euro declined after leaders of the EU member nations voiced 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 Greece is hinting that it may need to turn 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 FTSE 100 Index closed higher 7.54 or 0.13% to 5,650.16, in Paris CAC 40 Index decreased 17.19 or 0.44% to close at 3,920.99, in Frankfurt DAX index lower 34.98 or 0.58% to close at 5,977.33. In Zurich trading SMI decreased 8.30 or 0.12% to close at 6,889.44.

Separately, Greece reported unemployment in the fourth quarter increased to 10.3% form 9.3% in the third quarter of last year.

Local media reports in Greece suggest that the EU is likely to challenge Greece in a court case for not refunding the improper collection of VAT and other taxes.

Gainers & Losers

BMW AG rose 0.1% to €32.15 and Volkswagen AG rose 1.4% to €75.88.

Credit Agricole SA added 2.7% to €12.56 and Deutsche Bank AG the bank rose 1.2% to €54.79 after Lloyds Banking Group in London said it may turn profitable in the current year.

Electricite de Strasbourg SA rose 1.8% to €38.40.

La Doria SpA the producer of tomato-based products said 2009 sales fell 0.5% to €445.9 million from €448.2 million a year ago. Net profit in the year rose 247% to €19.8 million compared to net profit of €5.7 million a year ago.

Pfleiderer AG decreased 6.3% to €4.87 after the producer and supplier of engineered wood products said 2009 sales fell 21% to €1.38 billion from €1.74 billion a year ago. Net loss for the year was €69.8 million compared to net profit of €5.8 million a year ago.

SGL Carbon SE fell 1.5% to €20.88 after the maker of carbon and graphite products was downgraded to “underweight” from “neutral” at JPMorgan Chase & Co.

Technip SA rose 1.6% to €58.33 after the oil-services provider was upgraded to “overweight” at Barclays Capital.

Ubisoft Entertainment SA gained 6.5% to €10.02 after the company’s shares were upgraded to “add” from “sell” at Natixis.

DAX Index Movers

E.ON AG led the decliners in the DAX index of 1.84%, followed by ThyssenKrupp AG of 1.78%, in K+S AG of 1.75%, in Bayer AG of 1.55%, and in Metro AG of 1.41%.

Commerzbank AG led gainers in the DAX index with a rise of 1.04%, followed by increase in Adidas AG of 0.79%, in Deutsche Lufthansa AG of 0.58%, in Henkel AG of 0.54%, and in Linde AG of 0.46%.

CAC-40 Index Movers

Dexia SA led the decliners in the CAC-40 index of 2.15%, followed by ArcelorMittal of 1.93%, in Bouygues SA of 1.76%, in Alstom SA of 1.71% and in Vallourec SA of 1.67%.

Credit Agricole SA gainers in the CAC-40 index with a rise of 1.72%.followed by increase in Lagardere SCA of 0.83%, in Societe Generale SA of 0.76%, in EADS NV of 0.75% and in Carrefour SA of 0.57%.