January 3, 2012
The coming year will be a make-or-break one for the euro zone, as a crisis that began two years ago in tiny Greece threatens to engulf larger countries at Europe's core, sending ripples across financial markets and the global economy.
After a brief holiday respite, a series of European government-bond auctions and economic reports will set an early tone this month. Italy must issue around €118 billion ($153 billion) in treasury bills and bonds during the first quarter, beginning in mid-January, and Spain needs to refinance about €60 billion, according to Royal Bank of Scotland estimates. France and the Netherlands also auction bonds this month, gauging the resilience of the bloc's triple-A rated countries.
If the euro bloc passes these refinancing hurdles without too much damage, a closely watched summit of European leaders awaits in March, Greek elections most likely in the early spring, and French presidential elections in April and May—testing whether austerity-weary Southern Europeans are willing to stomach more budget cuts and whether Northern Europeans will keep footing the rescue bill.
Economic reports will shed light on the depth of the downturn in the euro zone, which accounts for about a fifth of world output. Ratings companies lurk in the background, having already put the euro zone on notice for possible downgrades if the crisis rolls on.
More
See also
No comments:
Post a Comment