Wednesday, March 23, 2011

MARKETS DELIVERED a cold response to an agreement by EU finance ministers to set up a permanent bailout fund

The yield on Irish two-year bonds was up 0.62 percentage points to 9.87 per cent in late afternoon trading after rising as high as 10.18 per cent. The pressure came as Taoiseach Enda Kenny prepared to press again at the summit for lower interest on Ireland’s bailout loans.
The debt of Greece, the other euro zone bailout recipient, was also under pressure. The yield on its two-year paper advanced 0.47 percentage points to 14.91 per cent.
Mr Barroso acknowledged he would have preferred the overhaul of the bailout schemes to have gone further but said it was not possible to achieve political consensus. “The commission would be in favour of increased flexibility of the EFSF and for the ESM but it was not possible to come to [a] more ambitious agreement,” he said. “I think it’s very important to accept that the ESM may intervene in the primary market but some of our other proposals did not meet consensus among the members so I don’t think now it’s useful to insist on that because we gain nothing by insisting on that.”

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