Investire Oggi - perpetue_week_50_2010 - © onik

maxolone 11-12-2010 19:52
Jean-Claude Trichet, president of the European Central Bank, has reiterated his call for eurozone
governments to adhere strictly to their deficit reduction plans and to pursue structural reform but has said
the regionтs economic recovery has accelerated and is пon trackи.
Mr Trichet, speaking in Madrid, declined to comment directly on the inability of eurozone governments
to agree how to tackle the sovereign debt crisis that has affected peripheral economies such as Spain,
Ireland and Portugal.
Spainтs finance minister said on Friday that the countryтs aim of reducing its budget deficit to 6 per cent of
gross domestic product next year was пunconditionalи.
Elena Salgadoтs comments in a radio interview were the latest official attempt to soothe financial markets
concerned about the debts of пperipheralи eurozone countries such as Ireland, Portugal and Spain and their
banking systems.
She acknowledged that Spain could be paying about 5 per cent interest for forthcoming debt issues,
compared with an average of 3.6 per cent for its outstanding obligations, but insisted this was not alarming.
Spain has пover-issuedи in recent months to give itself a cushion of cash reserves of …20bn or more, is
benefiting from historically low global interest rates and is so far on track to cut its budget deficit to 9.3 per
cent of GDP this year from 11.1 per cent in 2009.
It has also announced an array of austerity measures and privatisation plans to convince bond investors that
there is no risk of a deficit overshoot or a sovereign default.
But the spreads between Spanish and German bonds, a sign of the higher perceived risk of Spain, have crept
up over the past week to reach 245 basis points on Friday.
Even Italy, which has a moderate budget deficit but a high level of accumulated public debt, is now
regarded as vulnerable by some analysts. According to Capital Economics, the Italian government might
need to borrow more than …330bn ($440bn) next year.
пWe still think that the government may eventually need international financial support and might even
default,и wrote Ben May, European economist.
Investors and analysts, meanwhile, are shifting their attention from public debt to the fragility of the
eurozoneтs banking systems.
The European Central Bank warned on Thursday that eurozone banks could face problems in refinancing
…1,000bn of debt due over the next two years, partly because of пcrowding outи by cash-strapped
governments also tapping the bond markets.
Analysts at Germanyтs Commerzbank forecast on Friday that peripheral bond spreads could fall in the
weeks ahead, with states reluctant to issue debt at such high rates and the ECB supporting the market with
increased purchases of peripheral bonds, although they foresaw a renewed crisis by the
second quarter of next year.
Mais78 11-12-2010 19:54
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