Wednesday, November 23, 2011

Pressure on Merkel Amplifies

Wall Street Journal
November 23, 2011

German Chancellor Angela Merkel faces growing calls to soften her resistance to a potentially powerful weapon in Europe's debt crisis: euro-zone bonds that would raise appeal for investors but make each euro member liable for the debts of the others in the currency club.

Adding to the pressure is a market rout as investors flee nearly all euro-zone bonds other than German bunds. Spain on Tuesday was forced to pay a euro-era record 5.11% yield on three-month bills at an auction of treasury bills—more than double the rate it paid at an auction last month.

In a further sign of strain, banks' borrowing from the European Central Bank soared to the highest level since 2009, the central bank said Tuesday. The ECB said it allotted €247.2 billion ($333.5 billion) in seven-day financing to banks.

More

No comments: