Tuesday, September 4, 2012

Rough Patch Ahead for the EU

A number of reports over the weekend indicated a big week ahead for the European Union.

The Astute Bloggers was on the case, "U.S. COMPANIES PREPARED FOR GREECE'S EXIT FROM THE EURO."

And at the Wall Street Journal, "Euro Bond Markets Brace for a Stormy September":
Bonds issued by financially frail European countries have largely been on their best behavior in August, but several events in the next two weeks could awaken markets from their summer slumber.

The European Central Bank's governing council meets Thursday, and investors will eye the news conference that follows for details on the size and design of the central bank's proposed bond-purchase program.

Bond sales by some euro-zone countries are set to resume after a break last month, with Spain selling shorter-dated bonds only a few hours before the central-bank meeting.

A decision by the German Constitutional Court on the legality of the euro-zone's permanent rescue fund and parliamentary elections in the Netherlands, both on Sept. 12, will also fight for the attention of market participants. The outcome of the Dutch election remains highly uncertain at a time when investors are looking to politicians for decisive action.

Last, and most important, euro-zone finance ministers will meet Sept. 14. Following the meeting, Spain could well become the fourth country in the euro zone to seek assistance from its neighbors.

All these events are interlinked to some degree, which means that efforts to deal meaningfully with the crisis could still face hurdles.
Continue reading.

And at Der Spiegel, "Euro Crisis Starts to Bite: German Export Orders Fell Sharply in August."

More at The Economist, "As Greece fights to stay in the euro, Spain moves closer to a bail-out," and "Charlemagne: Don’t expect the European Central Bank single-handedly to save the euro."

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