Fears that the euro-zone debt crisis is spreading have put the brakes on any stock market recovery.
Ireland’s credit-worthiness was slashed to junk status by the ratings agency Moody’s, prompting the prime minister in Dublin to call for a comprehensive response from Europe.
Ireland now joins Portugal and Greece in the debt junkyard and with concerns about Italy now emerging, traders also want big gestures.
Oliver Roth, a trader on the Frankfurt stock-exchange said “We are expecting not so much from the EU finance ministers’ summit, because what we need here at the markets is a big throw (sic), the big solution. And we are not expecting that on this summit of the EU finance minister these days.”
In terms of being in hock, Italy is at the top of the world’s premier league. Only America and Japan owe more.
Italy’s central bank governor Mario Draghi has called for even more public spending cuts.
Finance minister Giulio Tremonti said there must also be a programme of privatisations.
In Paris, members of parliament have approved a so-called ‘Golden Rule’ which would require the balancing of the country’s books to be written into the constitution.
Any changes in the French constitution must be approved by the Assembly and the Senate.