The seven-year funding plan put forward by European Council president Herman Van Rompuy on Thursday and foreseeing 80 billion euros of cuts, has been rejected by Germany and the UK which consider the reductions insufficient. Smaller Member States also threatened to veto the project.
Talks on Greek bailout to continue over the weekend
An official close to EU talks on Greek bailout informed on Friday that the Eurozone is considering passing on 75% of ECB profits on Greek bonds in order to help the country attain sustainable debt levels. Other propositions include reducing the interest rate on the loans and extending their maturities.
According to Dow Jones Newswires Eurozone finance ministers will hold a telephone conference on Saturday in order to negotiate the details of the Greek bailout before the Eurogroup meeting scheduled for next Monday.
The Wells Fargo team of analysts believe that a final decision on the rescue should be reached by that time: "While we wouldn’t want to understate the challenges of reaching agreement on Greece, news reports have described some of the remaining obstacles as technical and legal, and thus the hurdles to a deal do not seem insurmountable."
They also add that "an underlying expectation that Greece will receive further financing seems to be helping many G10 currencies, while the emerging currencies are mixed but stronger on balance, in particular the emerging European currencies. With the odds still favoring further financing for Greece soon, our bias remains for gains in most foreign currencies over the near-term."
S&P ratifies France at AA+; keeps negative outlook
Standard and Poors's rating has confirmed the France's rating at AA+ on Friday According to a press release published recently. S&P downgraded France from AAA to the current AA+ in January.
S&P believes that "the French government is determined to implement budgetary and structural reforms, following up on measures already announced to reinforce the growth potential of the economy," says the agency.
Moody's Investors cut France from AAA rating this week.
Greece edging closer to bailout deal with Troika
Greece may soon breathe a sigh of relief, as a deal with the Troika looks closer, according to Greek-based paper ekathimeini, citing Finance Minister Yannis Stournaras who suggests only 10 billion euros stand in the way of a deal.
From ekathimeini: "Sources said that another 8 to 10 billion euros was needed to meet the target." The Greek paper also reports that "the IMF has accepted that Greek debt will not meet its target of 120 percent of GDP in 2020 and is willing for this to change to 124 percent in the same year."
EU budget talks resume Friday; positions too far apart, Merkel says
The EU leaders meeting taking place in Brussels concluded around 1am local time after 14+ hours of preliminary and bilateral talks, including about 1 hour of plenary debate on the €940bn EU budget proposal.
The meeting is due to resume Friday at midday Brussels time. “Time to sleep. It's a marathon.” - EU sources told to reporters, says Fabrizio Goria, correspondent from Italy at Eurointelligence, on his twitter account.
German Chancellor Angela Merckel said after the meeting she doubts an agreement will be reached on EU budget this week, and will likely need another few sessions of negotiations. She added positions are too far apart for now.
Meanwhile, according to an official statement by the European Council, Yves Mersch has been appointed to the executive board of the European Central Bank for a term of eight years as from 15 December. He will succeed José Manuel González-Páramo, who completed his term of office on 31 May.
