100 index was down 1.2% shortly before 1pm. Shares in Frankfurt were down 1.3%
and Paris had dropped 1.7%. Shares on the Dublin market had dipped 0.7%.
More worryingly for policy-makers, the yields on Italian and Spanish bonds have begun to climb again today.
The rate or yield on 10-year Italian debt rose above 6.0%, widely considered to be a threshold on financial markets, to 6.006%.
The yield on 10-year Spanish debt rose clearly above 6.0% to 6.296%.
These were the highest rates for these countries since the creation of the eurozone. In a potentially make or break week for the single currency, Tánaiste and Minister for Foreign Affairs Eamon Gilmore has said he remains confident that EU leaders meeting in summit on Thursday can reach a deal on securing financial stability.Mr Gilmore
said he believed leaders could reach agreement that should limit any contagion from a restructuring of Greek debt.
Months of uncertainty about a second rescue for Greece have pushed the sovereign debt markets to the limit. It is feared that unless eurozone leaders can agree an all embracing deal on Thursday then the euro will be in real trouble.
Germany insists private creditors should share the burden in a second rescue.Chancellor Angela Merkel has warned that the bigger and the sooner the better,otherwise creditors could face a more painful solution later.
This morning a spokesman for Chancellor Merkel said she was confident that a deal can be reached, but most observers are bracing themselves for some kind of Greek default as a result.
In that scenario, Jean Claude Trichet said in an interview today, the ECB would no longer accept Greek bonds as collateral for the liquidity it is currently providing to keep Greek banks afloat.
In what could be a subtle shift, he said help could be provided by eurozone governments. Speaking at a meeting of EU foreign ministers in Brussels, Mr Gilmore said he was confident that a deal on changes to the current bailout mechanism – such as bond buy backs, a lower interest rate and longer maturities – would cushion countries like Ireland against the shock of a Greek default.Merkel calls for European ratings agency
Angela Merkel has called for the creation of a European ratings agency following recent discontent over the downgrading of some EU economies, including Ireland.
Merkel said it was ‘important in the medium term that Europe also has a ratings
agency’ and argued that there was precedence for this as China also had an
agency of its own.
Her comments follow similar remarks by European Commission President Jose Manuel Barroso,who said there was a growing consensus that ratings agencies needed to be regulated.He added that the commission would bring proposals forward in the autumn, although he would not be drawn on what they might propose.There have been increasing calls for the creation of a European agency following the downgrade of Irish and Portuguese bonds to ‘junk’ status by some US-focused bodies.
The argument against assessments by the likes of ratings agency Moody’s is that they are effectively making self-fulfilling prophecies of doom, greatly aggravating the eurozone debt crisis.Last Monday,EU internal markets commissioner Michel Barnier said ratings agencies should be
banned from issuing assessments of a country seeking international aid, after Moody’s downgraded Portugal’s status.
So after the big political
powers in Europe tried again to use the
latest stress testing of the European banks to con the citizens of Europe into
thinking that all is well with the banks they have woken up to the fact it hasn’t
worked .No the citizens know that a bankrupt bank is still bankrupt even when
the bank manager tires to tell you otherwise. The Citizens of Europe have lost
all thrust in any stress testing. Thankfully the world markets are not like the
gullible citizens of Ireland who can be conned into giving the right answer if
you keep going back and asking them to change their original opinion. A pig’s
ear is still a pig’s ear no matter how you dress it up! The latest stress testing
of European banks is an insult to every citizen in Europe and the political stooges
of the international moneymen should be punished at home and abroad with a pan European
general strike. The peoples of Europe should not just lie down and submit to becoming
perpetual debt slaves to these modern financial dictators. It’s time to send a
strong message to the puppets in the Dail “no way won’t we pay”