Market exuberance for the trillion dollar European Union bailout package waned Tuesday as global markets reconsidered Monday’s gains. The euro, after briefly gaining 2.7 percent on the dollar but closing Monday with only a 0.4 percent gain, fell another 0.7 percent by 8:30 am in New York on Tuesday, with expectations of further losses.
While the availability of emergency funding alleviates the likelihood of an immediate default, countries including Greece, Spain, and Portugal still face the prospect of severe spending cuts to meet required “austerity” targets. Economists also predict that growth in the EU will lag that of the US for the remainder of the year and into 2011.
Global stock markets are giving up some of yesterday’s gains following the news that a deal had been reached to provide nearly US$1 trillion in funding to prevent the debt crisis in Greece from spreading to other EU countries. In London and Frankfurt, leading shares fell 1.5% after gaining 5% on Monday, while in Paris they lost 2% after soaring 9% in the previous session.
Source: BBC News
Protesters stormed the office of the Greek Finance Minister to vent their anger at the austerity measures the government is imposing to address the nation’s debt crisis. EU Commission Chief Jose Manuel Barroso told a news conference that he is “confident” talks underway to arrive at a bailout package for Greece, will be approved in time to meet the May 19th deadline. The Greek government says it needs emergency funding to cover debt payments due on the 19th of more than $10 billion.
“I’m confident that the talks will be concluded soon, meaning in the next days,” Mr Barroso told a news conference following the clashes.
“We believe that these solutions will be conducive to our actions and will prevent further possible effects of the contagion.”
Source: BBC News
