European markets have made early gains following the weekend’s 85 billion euro bailout of Ireland.
With British banks particularly exposed to Dublin’s financial woes, all eyes were on London Monday morning. The FTSE opened up, a trend repeated in Frankfurt and Paris.
Japan’s Nikkei was also high, as investors in Tokyo digested the Irish rescue.
Despite ongoing fears of new victims, particularly Spain and Portugal, for the time being the euro also appears steady after EU finance ministers efforts to defend it.
European Central Bank Governor Christian Noyer said:’‘It would be clearly in no country’s interests, none of the 16 countries interest, to put that remarkable achievement in question, so putting the euro into question is simply and will remain totally off the table.’‘
Some 35 billion euros of the massive bailout is expected to be used to shore up Ireland’s debt-riddled banks. Nevertheless, many in Ireland have criticised the 5.8 percent interest rate on the EU/IMF loan. Above the rate offered to Greece earlier this year, that has widely been seen as a warning to other euro zone states in the firing line that there will be no easy money and they must get their economic house in order fast.
Speaking earlier Spain’s Economy Minister Elena Salgado said:’‘Speculation does exist and we have to live with it. The desire of some investors to make money in the short term is also here and we know that we still have to improve our financial regulation,’‘
It remains unclear, however, if such statements will be enough to calm the markets.