France & Germany ready to agree £2tn bailout fund

Graham_Devon

France and Germany have reached agreement to boost the eurozone's rescue fund to €2tn (£1.75tn) as part of a "comprehensive plan" to resolve the sovereign debt crisis, which this weekend's summit should endorse, EU diplomats said.

The growing confidence that a deal can be struck at this Sunday's crisis summit came amid signs of market pressure on France following the warning by the ratings agency Moody's that it might review the country's coveted AAA rating because of the cost of bailing out its banks and other members of the eurozone. The leaders of France and Germany hope to agree a deal that will assuage market uncertainties or, worse, volatility, in the run-up to the G20 summit in Cannes early next month.

France would now have to pay more than a percentage point – 114 basis points – over the price paid by Germany to borrow for 10 years as the gap between the two country's bond yields widened to their highest level since 1992.

The news cheered US investors. All the major stock markets surged, with the Dow Jones Industrial Average rising 250 points, or 2.2%, to 11,651, after earlier falling by 101 points earlier in the day.

Should keep the markets happy until next year. It's precisely what they asked for, and seems they got it.

Massive amount of money. Could just "fix" the problem for now. Includes recapitilising the banks in order for them to pass the requirements for the 9% capital ratio....easily solved for the banks!

http://www.guardian.co.uk/business/2011/oct/18/france-and-germany-move-towards-2tn-euro-fund

vax2002

https://www.facebook.com/photo.php?v=10150860012110261

StevieJ

Looks like our politicians don't have a monopoly of the terminalogicalinexactitude

The Moody's warning compounded investor jitters after Germany's finance minister on Monday warned that it was not realistic to expect a definitive solution to the euro zone debt crisis to be reached at a key European Union summit to be held on Sunday

http://uk.finance.yahoo.com/news/U-S-stocks-rise-banks-bonds-reuters_molt-3074854976.html?x=0

Mrs_Bones

StevieJ wrote: »

Looks like our politicians don't have a monopoly of the terminalogicalinexactitude

The Moody's warning compounded investor jitters after Germany's finance minister on Monday warned that it was not realistic to expect a definitive solution to the euro zone debt crisis to be reached at a key European Union summit to be held on Sunday

http://uk.finance.yahoo.com/news/U-S-stocks-rise-banks-bonds-reuters_molt-3074854976.html?x=0

Yes that's what I've also been reading. Germany has also said that any agreement reached wouldn't be fully sorted till next year which going by how long it's taken to get the July deal sorted sounds about right. That July deal is now seen as being out of date, will anything sorted this weekend be out of date as well by the time it's agreed in writing by all countries? Europe just doesn't move at quick speed.

There is an awful lot of expectation riding on this weekend and the coming summit next month. Hopefully some sort of agreement will be reached but I won't hold my breath until it's all signed and sealed and if they reach an agreement in principle, how long will the markets give them to actually get it going in practice? We have been here before where they all come out smiling for the cameras saying they've reached an historic agreement only for it all to fall flat within weeks.

Wookster

FT Alphaville has a light hearted take on the article:



http://ftalphaville.ft.com/blog/2011/10/18/705456/breaking-europe-is-saved-actually-wait/

vax2002

A house wife could sort this mess out in 30 seconds, stop buying more stock than you sell and you wont go bust.
The only problem is, the politicians and there bosses are getting very rich out of buying in and importing all this stock, because they dont pay the suppliers we do and the credit card UKPLC is just about fully loaded.

StevieJ

Wookster wrote: »

FT Alphaville has a light hearted take on the article:



http://ftalphaville.ft.com/blog/2011/10/18/705456/breaking-europe-is-saved-actually-wait/

My that is is a bad set of Piles :eek:

StevieJ

vax2002 wrote: »

A house wife could sort this mess out in 30 seconds, stop buying more stock than you sell and you wont go bust.
The only problem is, the politicians and there bosses are getting very rich out of buying in and importing all this stock, because they dont pay the suppliers we do and the credit card UKPLC is just about fully loaded.

We had one of those and she sold off UK Ltd for a song :eek:

mathsmaster

vax2002 wrote: »

https://www.facebook.com/photo.php?v=10150860012110261

:rotfl:Funniest thing I've seen in a while!

Graham_Devon

Couldn't make it up.

Now they can't agree!!! Another summit, to follow the already extended summit to give them more time to think.

EU leaders are to hold another summit by Wednesday, because they will not be able to agree a rescue plan for the euro on Sunday.

"We have made enormous progress but not enough to take final decisions on Friday," Chancellor Merkel's spokesman said.
"In certain areas, we have reached agreement, in others, we are on the right track."

http://www.bbc.co.uk/news/business-15393260

Catapa

By the end of June 2011 Greece owed French banks 55.74 Billion Dollars, Italy owed French banks 416.37 Billion Dollars; with French banks not being the largest lenders, but also INCREASING their exposure to Italy and Greece over 2010, while German banks managed to REDUCE their exposure.

NOTE:
BRITISH banks are lending about 305.26 Billion Dollars to FRENCH banks. British and American financial insurers also took on most of the risk on the sovereign debt of southern Europe. Be prepared.