European financial markets stabilize the situation remains difficult, Spain

European financial markets stable. Analysis pointed out that European central banks continued to buy bonds of sovereign states is the main reason; At the same time, the most likely fire the Spanish city gates, the government is facing enormous political resistance, this resistance will be a major reform of its fetters.

Signs of European financial market is stable

ECB President Jean-Claude Trichet insisted that the euro as a common currency and no crisis. The current tightening of fiscal policy in some countries does not make the economy into recession.

Bond market traders from the information display, the European Central Bank on Thursday to buy a few strokes of Portugal and Ireland, national debt, the purchase of state action makes the decline in bond yields.

European Central Bank is now the main European markets sovereign debt buyers, bank shot in Europe, the future may be more investors to buy European sovereign bonds.

Portugal, Spain and Ireland, bond yields have declined slightly, for the European bond default insurance premiums have decreased greatly.

Nevertheless, the European sovereign debt crisis is still uncertain whether the so calm.

Jean-Claude Trichet pointed out that the debt crisis for the EU, sovereign governments should play a more important role, “the Government plays a vital role in the crisis, whether this effect is reflected in the budget or on structural reforms, but also whether it is through the EU Stabilization Fund, or joint action. ”

S & P recently said it may be in the next three months, the Greek sovereign debt rating from BB + to continue to lower, indicating that the European sovereign debt crisis continues to worry investors.

S & P pointed out that Germany after 2013 on the share of relief funds by the bondholders to the proposal, prompting the decision was made. S & P said, through multilateral areas of private sector debt restructuring will be more political pressure, rather than economic considerations.

Jean-Claude Trichet has to share for the private bondholders worried about the loss of sovereign debt, he said on Friday, the EU must show it will seriously consider this issue, and debt restructuring is a condition of receiving assistance of any country.

Spanish government into hardship

As the most likely to be affected by the debt crisis of the Spanish, the Government sad day every day, the market is rapidly growing pressure on Spanish Prime Minister Rodriguez consumption of the hands of political resources.

Analysis pointed out that both left-wing ruling party is facing a threat that conservatives control of local governments, as well as traditional supporters of a possible rebound for fiscal austerity.

Received 67.5 billion euros in Ireland after the rescue, for the sovereign debt spread panic in Spain and Portugal forward, Rodriguez is facing a huge reduction in the pension system and speed up rescue troubled banks and restore investor confidence, and many other problems.

Rodriguez, a very difficult situation, if, like Ireland, Spain, caused by domestic issues such as the EU intervention, then the current government is likely to fall.

Bond yields remain high, so the Spanish government suddenly increased financing costs. Currently, the 10-year bond yield was 5.2%, higher than Germany’s 2.3 percent bond the same, but the yield is still 8.95% better than bonds over the same period of Ireland’s rate is lower. This indicates that the situation in Spain is better than Ireland.

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