Despite The Summit Agreement Germany Still Holds The Key
Sober Look | Jul 01, 2012 06:53AM ET
On Friday Angela Merkel got the Bundestag approval she was seeking. Germany approved the Fiscal Compact and the ESM. Germany views the Fiscal Compact as a way to enforce austerity in the periphery countries.
Reuters : - There is a chance it could link approval to a change in the constitution - which would require Germany's first national referendum in the post-war era. At the very least, experts say, the court could say approval for any future integration, beyond the ESM and fiscal compact, would require constitutional change.
Thus in spite of Mario Monti's apparent "victory" at the summit, there will be a great number of hoops to jump through before the ESM is actually ready to buy Italian bonds. Some of the risk asset rally we've had on Friday may therefore be reversed once market participants fully absorb this reality.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.