Mar­kets edgy af­ter EU makes no new move on debt cri­sis

The Pak Banker - - International3 -

BRUS­SELS/ LONDON: Ten­sion on Euro­pean bond mar­kets was undi­min­ished on Tues­day af­ter Ger­man and fel­low euro zone states re­sisted IMF calls to do more to quell the cur­rency bloc's debt cri­sis.

Af­ter a five-hour meet­ing on Mon­day, the 16 min­is­ters said they would take no new mea­sures to tackle the threat of con­ta­gion, ar­gu­ing the ex­ist­ing emer­gency fund was suf­fi­cient and that a pro­posal for is­su­ing pan-euro zone bonds had not even been broached.

"We don't have any new de­ci­sion to an­nounce to you," Jean-Claude Juncker, the chair­man of the Eurogroup, told re­porters af­ter the talks.

The pre­mium in­vestors de­mand to hold the bonds of high-debtors Por­tu­gal in­creased in re­sponse while Spain's stayed at a high level.

"My gut feel­ing is that spreads are go­ing to carry on widen­ing for a while yet," said Chris Sci­cluna, deputy head of eco­nomic re­search at Daiwa Cap­i­tal Mar­kets.

"Any­one in the mar­ket who is ex­pect­ing some­one, some­where to fund more sup­port for the pe­riph­ery, whether it be the EFSF or the ECBthey're go­ing to be dis­ap­pointed." In­vestors re­main on edge about the debt cri­sis spread­ing from Greece and Ire­land, which have al­ready been granted EU bailouts, to Por­tu­gal and pos­si­bly Spain.

The ex­pected pass­ing of Ire­land's tough aus­ter­ity bud­get later on Tues­day may help un­der­pin the mar­ket. -Reuters

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