Article Image
News Link • Economy - International

Germany caves in over bond buying, bank aid after Italy and Spain threaten to block 'everything*


On Thursday night, Italy and Spain plunged an EU summit into disarray by threatening to block “everything” unless Germany and other eurozone countries backed their demands for help.

Mario Monti, the Italian Prime Minister, celebrated the agreement, reached in the early hours of Friday, as a “very important deal for the future of the EU and the eurozone”.

He could not resist reminding Angela Merkel, the German Chancellor, that Italy had also won on the football pitch, by defeating Germany two goals to one for a place in the finals of the European Championship.

“It is a double satisfaction for Italy,” he said.

The euro spiked against the dollar after news of the deal and Asian stock markets rose sharply, with Japan's Nikkei up 1.4pc and Hong Kong's closing Hang Seng 2.2pc higher. When trading began in Europe, London's FTSE 100 climbed 1.74pc, Germany's DAX added 2.39pc and France's CAC gained 2.86pc. In Spain the IBEX jumped 4.05pc higher and Italy's FTSE MIB is up 3.07pc.

Under the deal, Spanish banks will be recapitalised directly by allowing a €100 billion EU bailout to transferred off Spain’s balance sheet after the European Central Bank takes over as the single currency’s banking supervisor at the end of the year.


Join us on our Social Networks:


Share this page with your friends on your favorite social network: