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Markets underwhelmed by EU plan

Thursday, December 08, 2011 - 01:58

Dec. 9 - European shares were fairly flat in choppy trade on Friday morning as European leaders continued to work towards greater fiscal union as they fight to stop the debt crisis at a crucial summit. Joanna Partridge reports.

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Choppy trade on European markets on Friday morning as investors digested the news from Brussels that most EU leaders had agreed to pursue closer integration and stricter budget rules. But Britain said it could not accept proposed amendments to the EU treaty after it failed to secure concessions to protect its financial services industry. The FTSE Eurofirst 300 was up by 0.6% by mid morning. Howard Wheeldon is Senior Strategist at BGC Partners. SOUNDBITE: Howard Wheeldon, Senior Strategist BGC Partners, saying (English): "More positives have come out of this than negatives. The political situation has also been clarified, the UK stays out of it, leaving the eurozone to be the centre of power in terms of where they project themselves forward, how they resolve their problems, to the sovereignty issue I think has gone on in the right direction. I am quite satisfied with what I have seen." In Frankfurt, trader Robert Halver says the markets were waiting for more information on how Europe plans to put a stop to the debt crisis. SOUNDBITE: Robert Halver, Baader Bank, saying (German): "If at least the EU members manage a solution in the long-term then that's ok. Liquidity is still missing and that can only come from the European Central Bank. I hope there'll be more information." Investors seem so far unconvinced that EU leaders are going to be able to halt the debt crisis - even as the summit continues. The euro fell against the Swiss franc and other currencies on Friday morning. And Italy's borrowing costs rose again to 6.7%, close to unsustainable levels and Spain's bond yield also went up - meaning many think support from the European Central Bank, such as bond buying, will be needed in coming days. Euro zone leaders want to have their plans in place by March - and it's a long time until then. Joanna Partridge, Reuters

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Markets underwhelmed by EU plan

Thursday, December 08, 2011 - 01:58