Conditions at the EU summit are breaking down more than expected thanks to a position taken by Italian Prime Minister Mario Monti. Acting like a spoiled brat in a game of marbles, Monti refuses to let anyone else play unless he gets the big green marble he wants.
In less colorful terms, Bloomberg explains Monti Withholds EU Growth Pact Approval Unless He Gets Interest Rate Relief.
Italian Prime Minister Mario Monti may block the 120 billion-euro ($149 billion) growth initiative announced by European Union President Herman Van Rompuy without an effort to reduce its borrowing costs, two Italian officials said.
Italy is withholding its official endorsement as it pushes for collective action at an EU summit in Brussels to push down its bond yields, said the officials who spoke on the condition that they not be named.
EU Summit Gridlocked
Euroskeptics will be pleased to note the summit is gridlocked, at least for the moment. How do we know this? Easy. EU President Herman Van Rompuy said “talks weren’t gridlocked” and will continue through the night and later today.
Moreover, Hollande threatened to temporarily remove his marbles from the game as well.
Please consider this snip from Demands for Bond-Buying Agreement Roil European Summit
French President Francois Hollande said Italy and Spain ought to receive support from the euro area’s firewall funds and that their yields are still too high after the efforts they’ve made to reform their economies. Spain’s 10-year yields breached 7 percent and Italy auctioned 10-year securities at the highest yields since December yesterday.
Hollande said the growth remarks “aren’t enough” and that he’ll withhold endorsement of an EU fiscal pact, which was endorsed by his predecessor, Nicolas Sarkozy in December, at least until the end of the two-day summit.
“The euro zone cannot stay in the current circumstance, without a budgetary union and even more without a banking union,” Hollande told reporters.
Since German chancellor Angela Merkel will not agree to a banking union or a budgetary union, the EU summit is for sure deadlocked. It will remain deadlocked until Monti and Hollande change their opinions, effectively putting their marbles back in the game.
Mike “Mish” Shedlock
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