While we await details of the EU’s emergency lending mechanism and loan guarantee package for troubled countries – a statement is expected around 21.00 hrs (GMT) – here are the observations of Swedish Finance Minister Anders Borg…
as told to Reuters:
“We now see … wolfpack behaviours (on markets), and if we will not stop these packs, even if it is self-inflicted weakness, they will tear the weaker countries apart.”
and Bloomberg:
“In the night, when the markets are opening, we cannot afford a disappointment… “We now see herd behavior in the markets that are really pack behavior, wolfpack behavior.”
Meanwhile in Germany…
From the FT:
Angela Merkel, the German chancellor, was facing a bruising defeat on Sunday in a critical federal state election, as the polls closed in a fiercely fought race in North Rhine-Westphalia, the most populous state in Germany. Exit polls predicted a victory for the “red-green” alliance of Social Democrats and Greens over Ms Merkel’s “black-yellow” coalition of Christian Democrats and Free Democrats. The result, if confirmed, would give the red-green combination just enough seats to form a stable government, according to the poll on the ZDF television channel.
Perhaps we might have to wait a bit longer for that statement.
Update: (22:00hrs) Reuters are reporting that Germany wants the rest of the EU to agree to limit any government-backed loan guarantees for troubled countries to a maximum of €500bn, not the €645bn mooted earlier on Sunday. This is the second part of the rescue package. The first part, a €110bn balance of payments facility, has, according to the BBC, already been agreed.
EU ministers are leaving it late – there’s only an hour to go before Asian markets open and the wolfpack attacks.
Tick tock. Tick tock.
Related links:
EU Readies Emergency Fund Said to Be $645 Billion to Fight Off `Wolfpack’ – Bloomberg
Guest post: El-Erian on a critical weekend for Europe and the economy – FT Alphaville
The ECB matters more than Clegg – Robert Peston