Skip to comments.Debt Crisis Spreads to Italy & Portugal
Posted on 07/11/2011 6:34:40 AM PDT by Kaslin
In case you missed it, the European debt crisis escalated in Portugal and spread to Italy last week. Here are a few articles if you missed them.
European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region's third largest economy.Italian Emergency "Coordination" Supersedes Emergency "Coordination" in Greece, Portugal, Spain
European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.
Van Rompuy's spokesman Dirk De Backer said: "It's a coordination, not a crisis meeting." He added that Italy would not be on the agenda and declined to say what would be discussed.
Shares in Italy's biggest bank, Unicredit Spa, fell 7.9 percent on Friday, partly because of worries about the results of stress tests of the health of European banks that will be released on July 15. The leading Italian stock index sank 3.5 percent.
The market pressure is due partly to Italy's high sovereign debt and sluggish economy, but also to concern that Prime Minister Silvio Berlusconi may be trying to undermine and even push out Finance Minister Giulio Tremonti, who has promoted deep spending cuts to control the budget deficit.
"We can't go on for many more days like Friday," a senior ECB official said. "We're very worried about Italy."
Monday's emergency meeting will precede a previously scheduled gathering of the euro zone's 17 finance ministers to discuss how to secure a contribution of private sector investors to the second bailout of Greece, as well as the results of the stress tests of 91 European banks.
Italy was the victim of irrational speculation in the financial markets last week, German Deputy Foreign Minister Werner Hoyer told La Stampa, saying the country can balance the budget by 2014 and its banks are sound.Junckeritis Spreads
Finance Minister Giulio Tremonti wants to have a balanced budget in 2014, an ambitious but fair goal, Hoyer told La Stampa. For this reason, I cant see any excuse for irrational speculation of any kind.
wait — are you implying that there is no free lunch?
If Merkel tries to bail out any more failing European countries, she will be out of office. They’ll have to do their begging elsewhere. And we are as broke as they are, only we are “too big to fail”....for now.
Hi German tax payers, welcome to the party.
EU nations running out of German people’s money?
What do all these nations have in common?
These idiots have been warned about not only Italy, but Spain, Portugal, Ireland and Greece for ages now. Yet when the s*** starts hitting the fan, they still act all surprised, and start blaming "speculators."
Even if that were true, are they admitting that the financial condition of these nations is so fragile that "speculators" can cause them to crash and burn?
"Speculators" arn't the problem. The fact that PIIGS nations will default is simple math. Break out a pencil and paper - these are, socialist, unproductive societies that cannot pay or even service their debt.
Who was it that said you can avoid reality, but you cannot avoid the consequences of avoiding reality?
I actually own that. Read some of it, too.
The problem is the Euro. Normally, countries with financial woes can devalue their currencies, which then helps to stimulate growth. Greece and Portugal are stuck with a high value (relatively) Euro, that limits their options. The French especially don’t want to unravel the Eurozone. The Greek default is inevitable and, no doubt, they will seek to leave the Eurozone. The Germans are beginning to understand that they are throwing good money after bad.
“What do all these nations have in common?”
Economies based on wine, cheese and touring old buildings?/s;)
You mean Franceland and Italyland?
I see it’s from the NYT but I’m gonna compliment it anyway.