Daily Archives: May 9, 2010

Exit polls from a state election in Germany suggest there was no outright winner. Such a result would strip Angela Merkel’s government of its majority in the Bundesrat, the upper house of parliament in Berlin. This would make legislation harder to pass, and could affect the scale and speed of future eurozone bail-outs.

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Anti-contagion measures being discussed right now by EU finance ministers might be just a smokescreen for unprecedented action by the ECB. So says Erik Nielsen, chief European economist at Goldman Sachs.

Markets reacted negatively to the Greek bail-out, with equities falling, the euro falling and a rising cost of risk. In other words, markets began to price in a greater chance of contagion. EU finance ministers meeting today want to agree anti-contagion measures before markets open tomorrow. A statement issued Friday said all institutions of the euro area agreed “to use the full range of means available to ensure the stability of the euro area”. Read more