240 lines
5.9 KiB
Plaintext
Executable File
240 lines
5.9 KiB
Plaintext
Executable File
finance
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financialcrisis
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8184190
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-----
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# Euro falls, bond markets uneasy over debt crisis
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## The euro fell sharply against the dollar ahead of a crucial meeting of
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eurozone finance ministers over the direction of monetary union as a Hungarian
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bond downgrade left investors uneasy about European debts.
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![Euro falls, bond markets uneasy after Hungary downgrade][1]
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Eurozone finance ministers meet in Brussels later on Monday to attempt to
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overcome deep disagreement over whether to launch joint bonds and increase
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their bailout fund.
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3:43PM GMT 06 Dec 2010
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[Comments][2]
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The single currency slumped to $1.3277 from $1.3415 late on Friday and yields
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on 10-year bonds in the struggling eurozone economies of Portugal, Ireland,
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Italy, Greece, Spain, Belgium and Hurgary widened further, pushing up
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borrowing costs.
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Moody's Investors Service downgraded Hungary's credit rating to Baa3, one
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notch above junk, citing long-term fiscal concerns and external
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vulnerabilities, and said more downgrades may follow.
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Also weighing on sentiment is tomorrow's vote in Ireland to pass the austerity
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budget on which its rescue funding depends.
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James Nixon, chief European economist at Societe Generale, said: "The crisis
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will probably get worse before anything is done and [the Eurogroup meeting]
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could be another missed opportunity.
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"The ECB has bought some time by increasing its bond purchases but unless they
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are prepared to do that every day, it's like Canute - the tide will continue
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to come in."
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## Related Articles
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* [Euro collapse 'possible' amid deepening divisions over bail-out][3]
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06 Dec 2010
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* [IMF urges EU to boost €500bn bail-out fund to stem crisis][4]
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06 Dec 2010
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* [Federal eurozone could marginalise Britain, King told US][5]
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06 Dec 2010
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* [Belgium favours bigger eurozone rescue fund][6]
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04 Dec 2010
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* [Bernanke says QE3 'certainly possible'][7]
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06 Dec 2010
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* [Allied Irish bondholders to sue Irish state][8]
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06 Dec 2010
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Eurozone finance ministers, meeting in Brussels later on Monday, will attempt
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to overcome deep disagreement over whether to launch joint bonds and increase
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their bailout fund.
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The International Monetary Fund has called on the EU to boost their rescue
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fund and step up bond purchases to insure against a fresh financial crisis in
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the eurozone periphery.
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However, German Chancellor Angela Merkel rebuffed pleas to boost the emergency
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fund ahead of the gathering.
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"Right now I see no need to expand the fund," she said in Berlin today.
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Luxembourg's Prime Minister Jean-Claude Juncker and Italian Finance Minister
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Giulio Tremonti have called for the issuance of joint European sovereign
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bonds, or "E-bonds", to assert the "irreversibility of the euro" in an article
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in the Financial Times on Monday.
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This idea also received a rebuff with Ms Merkel saying EU treaties bar joint
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bond sales, which might force up Germany's borrowing costs - the lowest in
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Europe.
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"Eurozone politicians clearly understand that the structural integrity of EMU
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needs to be bolstered," said Rabobank analyst Jane Foley. "Unfortunately,
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there appear to be broad divisions as to how this can be achieved."
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[X][9] Share & bookmark
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[What are these?][10]
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* Share: [Share][9] [ ][11] [ ][12]
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[Tweet][13]
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http://www.telegraph.co.uk/finance/financialcrisis/8184190/Euro-falls-bond-
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markets-uneasy-over-debt-crisis.html
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Telegraph
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## [Financial Crisis][14]
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* ### [Finance »][15]
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* ### [Economics »][16]
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* ### [Business Latest News »][17]
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* ### [EU »][18]
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In finance
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[![Truncheon-wielding police in Barcelona have clashed with protesters at a
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makeshift camp that is one of dozens erected in Spain to protest at high
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unemployment][19] ][20]
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### [Spanish anti-crisis protests][20]
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[![Thousands of protesters occupy Puerta del Sol square in Madrid][21] ][22]
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### [Huge protests in Madrid][22]
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[![Riot police use tear gas as protesters throw petrol bombs in Athens][23]
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][24]
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### [Tear gas and petrol bombs][24]
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[![Irish bank stress tests: the key points][25] ][26]
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### [Irish bank stress tests: key points][26]
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[![Q&A: What is the Independent Commission on Banking?][27] ][28]
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### [Q&A: What is the Independent Commission on Banking?][28]
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[X][9] Share & bookmark
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Delicious Facebook Google Messenger Reddit Twitter
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Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
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[What are these?][10]
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Share:
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* [ ][9]
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* [ ][11]
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* [ ][12]
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* [Tweet][13]
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* Advertisement
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![][29]
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telegraphuk
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Please enable JavaScript to view the [comments powered by Disqus.][30] [blog
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comments powered by Disqus][31]
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[![][32]][33]
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Advertisement
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