Euro of summit: Bank help to Greece fixed
Less power for rating agencies
The heads of state and heads of government of the euro-zone have agreed on Thursday on a 14-points plan. Among them the participation of private investors in the second rescue package also falls for Athens as Germany had demanded. Also it was suggested reducing the dependence of the single countries on external rating agencies.
For the first time in the EU-debt crisis the finance branch from itself wants to take part in the rescue of an euro-country. This arises from the draught for the final explanation of the Brussels euro-summit. In the paper which is given to the news agency DPA one says: „The financial sector has explained his readiness to support (…) Greece on a voluntary base with a row of options.“ For example, the exchange of Greek loans belongs to it in new Bonds with longer terms.
Banks would have to renounce 20 percent
The discussed model might run out to a write-off need of about 20 percent at the banks. In the approach some institutes had feared a bigger worth correction need. However, according to result of the summit the number can still change, one said. All together Greece needs about 115 milliard euros till 2014. According to a proposal of the international bank lobby IIF private creditors would contribute, all in all, 17 milliard euros to the financing of Greece.
Interest rates of about 3.5 percent
Besides, lower interest rates and longer terms beinged considered. The loans from the euro-rescue screen EFSF should be extended from 7.5 for at least 15 years. Besides, there will be suitable supervision programmes. The interest rates should amount “to about 3.5 percent without going, however, under this refinancing. There should be to incentive to support the programme, including from securities of Greece.
With a „European Marshall’s plan“ growth and investments should be strengthened in Greece. Besides, it is above all about regional facilities and structural funds.
Danger of infection minimise
Because Greece is in an incredibly serious situation within the euro-zone, a special solution is necessary. The financial sector has stressed his readiness to help Greece on voluntary base and the points Loan exchange, the term lengthening of existing loans as well as the repurchase are called by loans. To improve the efficiency of the EFSF and to remove the danger of infection, the flexibility of the euro-rescue screen should be raised.
The lending terms of the EFSF on Greece are also granted Portugal and Ireland. Besides, the summit draught refers to the readiness of Ireland to take part constructively in the discussions about a common basis for assessment with the corporation tax.
Reminder to lower budget deficits
In general it is pointed out to the meaning of the lowering of budget deficits on less than three percent 2013. In this connection the savings package of Italy which wants to achieve this aim in 2012 is welcomed. Moreover, the reform strains of Spain are promised in financial, tax and structural area. As a result of the banks of “stress test” the EU countries should decide suitable rallying measures for fallen through banks.
To the area of the economic control one says, everything is done to reach an arrangement with the EU parliament above all over the preventive arm of the stability pact. The European Parliament wants the reverse qualified majority also with the preventive arm, the EU states are up to now against it. National legal basic conditions should be introduced in the end of 2012.
EU President of the Council Herman van Rompuy should present in close collaboration with the chairperson of the eurogroup, Jean-Claude Juncker, concrete proposals in October to present a better crisis management in the eurozone with improved operating procedures.
EU summit: Euro at times more than 1.44 dollars
The standing out arrangement of the European heads of state and head of government at the Brussels EU-special summit to the debt crisis has given a high-altitude flight to the course of the euro on Thursday.
At last the communal currency cost 1.4372 US dollars. In the point the course had climbed even up to 1.4401 dollars. About midday statements of euro group boss Jean-Claude Juncker to a possible partial loan failure (Selectiv Default) of Greek state loans had still still strongly loaded the currency and had pressed her day low-pressure area with 1.4137 dollars. When then in the afternoon more and more news trickled through to the arrangement at the summit, it also went for the euro precipitously uphill.
The European central bank (EZB) had the authoritative course on 1.4222 (Wednesday: 1.4207) dollar settled. The dollar cost with it 0.7031 (0,7039) euros.
With a strong relief jump the euro has said goodbye on Thursday from European dominated trade. The communal currency jumped in view of positively taken up news of the euro-summit almost on 1.44 USD – a sentence of more than 2,5 cents of the day low-pressure area.
“The pressure gives way from the euro because there will be no insolvency of an euro-country”, according to a trader with look at the standing out arrangement at the EU-crisis summit. However, officially nothing would be known, only statements from a document. At the moment the scenario is played that the EFSF is equipped with more competence. This might contain that he should dispose of more power and may buy in the secondary market loans. Besides, analysts go out predominantly from a lengthening of the term of Greek’s loans and lowered interest.
“The big question is furthermore whether the rating agencies ‘Selective Default’ for Greece exclaim” of so another market participants. “To prevent discussions, a partial payment failure, are from the table”, said the Dutch Minister of Finance Jan Kees de Jager in addition in Hague. An other stranger is whether a partial payment failure leads necessarily to the fact that the EZB the loans of the debtor does not accept more than security. This would not be cleared. However, at the moment it is assumed from the fact that the EZB might provide if necessary “own rating” for the respective country. However, such a step costs credibility of the European central bank once more, on the other hand, it would be a usual way.
Already before standard & Poor’s had to know to evaluate given, such a called running over of Greek obligations in longer terms possibly than partial payment failure. “This suggests that running over component of the second rescue programme might become”, said a trader.
As the biggest obstacle for another rescue programme for Greece the question is further valid after a participation of the private creditors on whom above all the Federal Government knocks.
No prop for the dollar was the strong jump in the Philadelphia Fed index in view of such EU joy. He has risen in July on 3.2 of deficit to 7.7 points. The subcomponents had risen predominantly, thus that for orders and employment. Only the weekly applications for US unemployment assistance disappointed something. They increased around 10,000, although an unchanged state had been expected. Indeed, the house price index FHFA easily improved.