Wednesday, August 10, 2011

Markets Tumble Again, Now It's France's Emergency

One really had to wondered who on earth would be buying stocks yesterday to create that silly rally.

Things are reversing today as Nicolas Sarkozy interrupted his vacation with wife Carlan Bruni on the French Riviera to hold an emergency government meeting on the debt crisis.

He will meet Wednesday with the prime minister, who also quit his own vacation, in Italy, and finance and budget ministers (don't know where they were vacatining), as well as the French central bank chief.

"...the  eurozone debt crisis continues, fuelled by fears that Spain or Italy might default on their debt and possibly spark a break-up of the currency shared by 17 countries.

EU leaders are trying to implement a July 21 agreement aimed at beefing up the euro's defences. But many of the measures need national parliamentary approval and that process that could drag on to the end of the year in some cases".

"The debt crisis has turned public deficits into a major issue in the run-up to next year's presidential election in France, which has not produced a balanced budget in three decades.

France is often cited as as a possible candidate for losing the coveted top credit rating after the United States, which Standard & Poor's last week stripped of its its AAA status.

But the government has been insisting that it will meet its deficit reduction targets, even if interest payments on France's public debt are set to be the biggest expense for the state this year". (report)

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