EU Calls Emergency Meeting As Crisis Stalks Italy!

- You cannot solve a debt problem with more debts! This is not about bailing out the PIIGS. It is about bailing out the banks and shoving the bankster debts onto the sheeple. It is about financial rape via ‘Privatization’ ie. countries being forced to sell their national assets at pennies to the dollar. It is about world conquest, the destruction of national sovereignties via fraudulent finance at exorbitant interest rates. These Illuminist banksters are just gangster loan sharks in Armani suits!
– - The world is heading towards a global currency crisis! The Euro, UKP, JPY and finally the USD will all become toilet paper! The rest of the world’s minor fiat currencies will not survive! Got gold yet?
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EU calls emergency meeting as crisis stalks Italy
By Luke Baker , http://www.reuters.com/
(Reuters) – European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region’s third largest economy.
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European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region’s finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.
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Van Rompuy’s spokesman Dirk De Backer said: “It’s a coordination, not a crisis meeting.” He added that Italy would not be on the agenda and declined to say what would be discussed.
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However, two official sources told Reuters that the situation in Italy would be discussed. The talks were organized after a sharp sell-off in Italian assets on Friday, which has increased fears that Italy, with the highest sovereign debt ratio relative to its economy in the euro zone after Greece, could be next to suffer in the crisis. A second international bailout of Greece will also be discussed, the sources said.
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The spread of the Italian 10-year government bond yield over benchmark German Bunds hit euro lifetime highs around 2.45 percentage points on Friday, raising the Italian yield to 5.28 percent, close to the 5.5-5.7 percent area which some bankers think could start putting heavy pressure on Italy’s finances.
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Shares in Italy’s biggest bank, Unicredit Spa, fell 7.9 percent on Friday, partly because of worries about the results of stress tests of the health of European banks that will be released on July 15. The leading Italian stock index sank 3.5 percent.
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The market pressure is due partly to Italy’s high sovereign debt and sluggish economy, but also to concern that Prime Minister Silvio Berlusconi may be trying to undermine and even push out Finance Minister Giulio Tremonti, who has promoted deep spending cuts to control the budget deficit. “We can’t go on for many more days like Friday,” a senior ECB official said. “We’re very worried about Italy.”
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Monday’s emergency meeting will precede a previously scheduled gathering of the euro zone’s 17 finance ministers to discuss how to secure a contribution of private sector investors to the second bailout of Greece, as well as the results of the stress tests of 91 European banks.
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Spain, traditionally seen as the next potential domino in the crisis, has managed to retain its access to market funding through fiscal reforms. But because of the large sizes of the Spanish and Italian economies, pressure on the euro zone would increase dramatically if those countries eventually needed financial assistance.
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Private analysts have estimated a three-year bailout of Spain, based on its projected gross issuance of medium- and long-term debt in 2011, might cost some 300 billion euros — excluding any additional money for cleaning up Spain’s banks. A three-year rescue of Italy could cost twice that.
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German newspaper Die Welt quoted an unnamed ECB source as saying on Sunday that the EFSF, which has a nominal size of 440 billion euros, was not large enough to protect Italy because it had not been designed to do that.
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In Italy on Sunday, politicians and government officials scrambled to present a united front and defend Tremonti. Umberto Bossi, the powerful leader of Berlusconi’s Northern League coalition allies, praised Tremonti for “listening to the markets.”
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“From tomorrow, we have the job of showing we are united and blocking the effort of speculators,” said Paolo Bonaiuti, a government undersecretary and senior aide to Berlusconi.
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“In the coming months we have 120-130 billion euros of bond issues to deal with, so we need cohesion and united intent; it’ll take effort to show that the markets are overdoing it.”
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However, Berlusconi himself was silent over the weekend and canceled two appointments to speak, and it was not clear how long the appearance of consensus in the government over austerity plans would last.
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One factor behind bond markets’ growing instability is a sense that the euro zone’s basic strategy for dealing with debt problems — keeping countries afloat with emergency loans in the hope they can grow their way out of their debts within a few years — is flawed. More radical action to cut the countries’ debts or boost economic growth may be needed.
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