No ‘definite solution’ to euro rescue
HOPES a rescue package for debt-laden Europe would be announced this weekend were dashed yesterday by the German finance minister.
Wolfgang Schäuble warned EU leaders would not arrive at a “definitive solution” and that only limited progress was likely when they meet later this week.
European stock markets fell with the FTSE 100 closing down 29.7 points to 5436.7 after starting the day brightly, at one point rising 77.4 points.
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Shares have rallied over the past fortnight after German Chancellor Angela Merkel and French President Nicolas Sarkozy promised to develop a plan to deal with the crisis by the end of this week.
Many expect it to involve a major recapitalisation of banks across the continent allied to a massive increase of the bailout pot – the European Financial Stability Facility – to underpin Italian and Spanish government debt. Private investors will also be expected to take a severe hit on Greek debt.
Wolfgang Schäuble warned EU leaders would not arrive at a “definitive solution” and that only limited progress was likely
Schäuble was confident ways to secure “systemically risky banks” would be found.
IG Index chief market strategist David Jones said Schäuble’s statement was a sign the Germans felt market expectations needed to be managed while CMC’s Colin Cieszynski said it might take “several months or even into next year to reach a final resolution”.