You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Merkel, Sarkozy May Have to Rescue Euro Nations to Avert Regional Crisis [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
Purveyor Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-18-09 10:27 AM
Original message
Merkel, Sarkozy May Have to Rescue Euro Nations to Avert Regional Crisis
Advertisements [?]
Source: Bloomberg

Feb. 18 (Bloomberg) -- Germany and France may be forced to contemplate the bailout of entire nations rather than just individual banks as European government budgets buckle under the weight of recession.

German Finance Minister Peer Steinbrueck became the first senior policy maker to broach the topic earlier this week, saying some of the 16 euro nations are getting into difficulties and may need help. He went further today, saying Germany would show its ability to act. French officials are also concerned about market tensions as the cost of insuring Irish, Greek and Spanish debt against default rises to records and bond spreads widen.

The nightmare for Angela Merkel and Nicolas Sarkozy is that widening deficits will prompt investors to shun the debt of some countries, sparking a region-wide crisis. While few investors are yet forecasting any defaults, the mere risk of it may prompt the blocs two richest economies to ignore the European Central Bank and announce their willingness to come to the rescue.

When push comes to shove Germany, France, the larger players will bail out those smaller peripheral players, said Alex Allen, chief investment officer of Eddington Capital Management. You cant let one part of the system fail because it leads to failure of the whole system.

Allens betting that the risk at least one nation will leave the bloc is higher than the market currently expects.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aDG...
Printer Friendly | Permalink |  | Top
 

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC