More Europe
Further to my discussion about Greece at the beginning of this week, it appears that chances of the Greek government obtaining an easing of the terms of its austerity package this week are dimming. Chancellor Merkel noted yesterday that she will not agree to a time extension in her meeting tomorrow with Prime Minister Samaras. Rather, the "troika" report scheduled for early September (an updated audit of Greek finances by the European Central Bank, the EU and the IMF) will form the basis of any decision. So, the simmering continues.
In Spain, expectation has once again emerged that the country will ask for a government bail-out following its monthly Cabinet meeting tomorrow. After the July meeting, Spanish Deputy Prime Minister Soraya Saenz de Santamaria felt compelled to indicate that "Spain will not ask for a bail-out and the bailout is not an option". The Spanish ten-year bond yield (what Spain pays to borrow long-term funds), which just prior to that meeting had reached an all-time high of 7.6%, declined significantly. However, that yield is on the rise again. It would seem the market, at least, is expecting a formal Spanish request to the EU, if not tomorrow, then soon.
The month of September will be an active one indeed in, among other cities, Brussels and Berlin.