In case you missed it, the European debt crisis escalated in Portugal and spread to Italy last week. Here are a few articles if you missed them.
- Italian Yields Hit 9-Year High, Spreads Record High vs. Germany; Italy’s Finance Minister in Rent Scandal
- Michael Pettis Warns of “Virulent Political Turn Against Euro”, Adds Clarification to “Gold’s Honest Discipline”
- ECB Suspends Collateral Rules for Portuguese Debt, Hikes Rates .25; Trichet Says “No” to Selective Default, Market Yawns
In response, the EU does what it always does.
- Blame Short Sellers
- Declare an Emergency Meeting
- Deny there is an Emergency Meeting
Don’t Worry “It’s a Coordination, Not a Crisis”
Taking an overdone play straight out of the Jean-Claude Juncker “lie when it gets serious” handbook, European Council President says “It’s a coordination, not a crisis meeting.”
That is all you need to know to determine a full blown crisis is underway in Italy.
Please consider EU calls emergency meeting as crisis stalks Italy
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.
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.
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.
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.
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.”
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.
Italian Emergency “Coordination” Supersedes Emergency “Coordination” in Greece, Portugal, Spain
The first thing to do in any crisis, before there is time for further “coordination” is to blame short sellers and speculators for the crisis.
Italy was the victim of “irrational speculation” in the financial markets last week, German Deputy Foreign Minister Werner Hoyer told La Stampa, saying the country can balance the budget by 2014 and its banks are sound.
Finance Minister Giulio Tremonti “wants to have a balanced budget in 2014, an ambitious but fair goal,” Hoyer told La Stampa. “For this reason, I can’t see any excuse for irrational speculation of any kind.”
The proclamation from Hoyer that “Italian banks are sound” gives a strong indication of something most knew anyway: “They aren’t.”
Thus, it is all too obvious that Hoyer is inflicted with the highly-contagious Junckeritis virus, now rapidly spreading across the EU.
Mike “Mish” Shedlock
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