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THE PRESIDENT OF the European Commission, Jose Manuel Barroso, has written to EU governments warning them that the Eurozone debt crisis is spreading and may spread beyond its smaller economies.
The BBC reports that Barroso urged governments to revisit the current status of the European Financial Stability Fund, the Eurozone’s current bailout mechanism, so that the debt crisis which has already forced three countries into default may not spread.
The call for a renewed debate on the purpose of the bailout fund has not been welcomed, however, with a spokesman for German finance minister Wolfgang Schäuble saying it may not be wise to reopen discussions less than two weeks after amending the terms of the bailouts for Greece, Ireland and Portugal.
The cost of borrowing for larger, but vulnerable, economies like Spain and Italy has risen again today as investors shun the opportunity to lend money to their governments.
Bloomberg reported that the Spanish treasury this morning managed to sell off €3.3bn of medium-term bonds, but was forced to pay a far higher interest rate than it had done even a month ago.
For three-year bonds, Spain was forced to offer an interest rate of 4.81 per cent – well up from the 4.29 per cent that it paid for an identical bond issued only last month.
Reuters reported that the European Central Bank had resumed its controversial policy of buying up the bonds of weaker countries, but cited an inside source which said it was only buying government bonds issued by Ireland and Portugal.
European stock markets are also facing a tumultuous afternoon: the FTSE 100 index is down over 3 per cent this afternoon as investors dump shares in favour of gold and silver.
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Heh… here’s a little suggestion… STOP spending money you don’t have…
Bring back punt….all is forgiven!
Agree
The Irish Central Bank is busy printing the punt… Fact.
Yeah right.
Its true my friend. It makes sense doesn’t it?
What to do…? Gold bubble seems to be growing but if the Euro hits the fan there’ll be one hell of a scramble for safe havens.
Would be nice, but I don’t think so
what we have to be careful of here is a 2-tiered Euro – we’d be on the lower tier if they do that and screwed.
Bring back Lady Lavery!!!!
Is it Jose? no way! dog in the street anticipated this months ago…
No way Jose! :-)))
Wow a letter is writen about the worst financial crisis europe has known. That should sort it out. Not.
Barroso is an idiot and we all knew that, or not?
Jose keep your comments to yourself !
So it takes Spain and Italy to go into melt down before the big wigs cop on.Well even the dogs on the street knew this was going to happen.Ireland,greece caught the cold.Now the rest of europe is getting the flu.Any help now is two little two late.Germany wont allow the euro to fail because that would be bad for there exports.But what price are they willing to pay to keep the euro.Time will tell.
Germany doesn’t have enough cash to prop up the entire eurozone.
Then a two teir europe is on the cards.Bad news for p.i.g.s.
Pigs Horrible expression favoured by the uk right wing press , it appeals to their racist cores. Please don’t use it here
I must say, my enthusiasm for the entire European project and the single currency is waning. Remember when membership of the EU was about democracy and exciting shared futures? Now it’s about Germany and France barking at everyone all the time. I really and truly can’t see the euro recovering from this. I honestly think this is the beginning of the end of the single currency. Is it true that a return to the punt will mean an immediate â
The debit crisis is as catchy as crabs
When are they going to cop on and admit that adding to the Eurozone’s debt is only going to make things worse.
The term P.I.G.S. is and has been, used all over the world when euro debt has been talked about.Its not a uk term.
have your say