The single Euro bond market may not have sparked the robust support of Angela Merkel or Nicolas Sarkozy, but it is definitely going to happen someday, market analysts said. The idea is supposed to insulate weaker economies from downturns, but will definitely enrage Euro-sceptics all over. By SIPHO HLONGWANE.
Tuesday’s meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy was notable in that nobody seemed to get what they wanted. Both leaders called for a European “economic government”, but failed to give it the robust support to convince the market they were in a hurry to implement it. Investors were also apparently waiting for a beef-up of the R4.4 trillion European Financial Stability Facility, the fund already in the pipeline to bail out Ireland, Portugal and fund a second Greek financial rescue.
Arnab Das, managing director of market research at Roubini Global Economics, characterised the talk of a Euro bond as a “step forward” in an interview with Bloomberg TV. “I think it’s an important signal that they’ve put Eurobonds on the table,” he said. “Several of Merkel’s advisors had talked about the concept very openly. The problem is that events are running ahead of policy-makers at this point.”
The Euro bond plans came under withering criticism from Daniel Hannan, a conservative British European MP. “See, once again (http://blogs.telegraph.co.uk/news/danielhannan/100071749/french-prime-minister-britain-must-participate-in-european-economic-governance/), how, whatever the question, the answer is always more Europe. EMU succeeding? More Europe! EMU in crisis? More Europe! EMU just bumbling along? More Europe! Revolution in Tunisia? More Europe! Overcast day in Eindhoven? More Europe!” he thundered in The Telegraph. DM
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