EU’s support pledge fails to inspire
European leaders said they had struck a deal yesterday to help Greece overcome its fiscal problems but a lack of details on the assistance to be given left markets uninspired. The countries sharing the euro currency said they were ready to take «coordinated measures» if necessary to support Greece. However, European Union President Herman Van Rompuy gave no firm offer of financial aid to Greece, and insisted that Greece hadn’t asked for help. Stock indices fell sharpest in euro member states, with Germany’s DAX closing 0.6 percent lower at 5,503.93 and France’s CAC 40 shedding 0.5 percent to 3,616.80. Britain, which is not a eurozone member, saw its FTSE 100 index actually rise, by 0.5 percent, to 5,161.50. «Greek bailout plans fall short on details,» said Jonathan Loynes, chief economist at Capital Economics. «Those hoping that today’s meeting of EU governments would produce a detailed and concrete package of support measures for Greece appear to have been distinctly disappointed.» Greece’s main stock index ended marginally in the red yesterday after showing mid-session gains, while bond spreads – which measure the market’s perception of a risk of default – widened to where they were before the announcement, although they remained well below last week’s levels. The euro tumbled against all of its most-traded counterparts. It dropped 1 percent to $1.3606 in early trade in New York, from $1.3737 on Wednesday. «We don’t have a lot of detail about what the structure of any aid or bailout is going to be,» said George Davis, chief technical analyst at Royal Bank of Canada in Toronto. «Given the state of their finances, any agreement on aid will come with conditions of what Greece has to do to get its house in order and we may see a push lower in the euro,» Davis added.
