Eurozone finance ministers will hold a video conference on October 31, with talks to be centered around the next aid disbursement for Greece, desperately in need to get an additional EUR 31.5 bln to meet its financial obligations.
Recent reports suggest a deal should be days away after the Troika mission confirmed last week the next tranche of funds is expected to be unlocked, which adds to advanced discussions over a 2-year extension for Greece to meet the deficit target.
According to Market News International, "EUR 31.5 bln may be released at the November 8 EU summit" citing a spokesman for Eurogroup head Juncker. The news outlet, citing European sources, also mentioned, that there is still seven euro area members skeptical on extending more aid to Greece.
Markets may also rest reassured by a broad-based agreement from the Greek Socialist party to vote in favor of further austerity cuts amounting 13.5 bln euros, raising the prospects of approval through the parliament, and therefore, easing pressures to get the bailout money.
Spain to receive first tranche of bank aid early December
Spain expects to receive the first tranche of the European Union aid package for its banks by early December, a spokeswoman said Tuesday.
Spain expects the European Commission to approve the banking reforms by Nov 15 and authorize the first installment of a program of up to €100 billion within 3 weeks, the spokesman said.
Meanwhile, the government reported that the Spanish deficit reached 3.9% of GDP through September, while including extraordinary items like transfers to regional governments, the deficit arrives to 4.4% from 4.77% in August.
EU officials in talks to find a solution for Greece
European stocks rose on Tuesday following a succesful Italian bond auction and amid EU officials' talks on the situation in Greece and a possibility of a new haircut on its debt.
French Finance Minister Pierre Moscovici and his German counterpart Wolfgang Schaeuble held a press conference in Berlin on Tuesday during which they expressed their determination to prevent Greece's exit from the Eurozone.
Moscovici told reporters that both countries wanted Greece to remain part of the Eurozone and that an agreement on the austerity program should be reached before the end of next month.
"We continue to wish for a complete solution in the month of November to end the uncertainty and we will do everything we can together to get one," Moscovici said.
IMF head Christine Lagarde and German Chancellor Angela Merkel will discuss the situation in Greece later today in Berlin. Tomorrow the matter will be further examined during a Eurozone finance ministers' conference call.
Italy sells 5 and 10 year bonds at lower yields
The Italian government sold €4B of 5 year bonds at 3.80% (previously at 4.09%) and £3B of 10 year debt at 4.92% (previously at 5.24%), hitting the targeted amounts. The Italian Debt Management Office officials were very pleased with the average yields obtained, the lowest since May 2011, and with 91-92% of the funding needs taken care of.
Rajoy opposes the EU Budgetary Commissioner idea
After the conclusion of the fourth bilateral summit between Italy and Spain in Madrid, Mariano Rajoy expressed his opposition to the German idea of creating a European Budgetary Commissioner to control members. The Spanish prime minister has claimed, however, a new European plan aimed at boosting the economy and overcome the crisis.
Monti has supported Rajoy when he called for greater political, banking, economic and fiscal integration. Both leaders have been more united than ever, in his words, and have stressed that they defend common interests.
Troika calls for new Greek haircut, Germany opposes
The German newspaper Der Spiegel has reported that the troika could be considering a proposal on a Greek debt haircut, aimed at bringing down its massive debt load. This time, taxpayer money from Germany and other donor countries would be involved.
Resistance is substantial. The German government quickly responded, ensuring that such haircut wouldn’t be economically viable.
German government spokesman, Steffen Seibert, and Finance Minister Wolfgang Schäuble, have come out against these rumors assuring that the laws of their country prohibit presidents donation credits or guarantees to countries that have high chances of default.
To Seibert, is illogical for public creditors’ to support a haircut when Greece is negotiating aid, and has been given a two-year extension to meet its deficit targets.