Italian PM warns weak response of EU Summit will imperil Europe
A weak response to the Eurozone debt crisis at a European Union summit on 28-29 June would not only fuel market speculation but raise the risk of European project being rejected, Italian Prime Minister Mario Monti said Friday.
Unless the EU agrees to bolster anti-contagion firewalls and draft a road map to tighter integration, anti-euro forces would be strengthened, even in the Italian parliament, said Mr. Monti to local and foreign press.
Monti expressed his hope that the EU summit will agree a medium-term prospect of strengthening integration and a combination of achievable measures to boost the Eurozone's financial stability.
This would entail, among other things, a closer banking union and guarantees for deposits, Monti told Italy's La Stampa, France's Le Monde, Germany's Sueddeutsche Zeitung, Spain's El Pais, Britain's The Guardian and Poland's Gazeta Wyborcza.
Speaking ahead of a meeting in Rome later on Friday with German Chancellor Angela Merkel, French President Francois Hollande and Spanish Premier Mariano Rajoy, Mr. Monti said agreement between France and Germany was a necessary condition for EU progress but not a sufficient condition.
He said things had improved for Italy since he took over from former prime minister Silvio Berlusconi last November but we have a very long way to go.
Monti also noted that Germany has been benefiting from the ongoing crisis, though he acknowledged the contribution from the Eurozone's economic engine.
Germany is profiting from this. Germany is financing itself at such low interest rates also because of a speculation effect from the high interest rates of others, he said.
Gray clouds over Germany as confidence falls
The business sentiment in Germany fell for the 2nd consecutive month to hit its 2-yr low, key index showed on Friday.
Driven by a deep plunge in investor sentiment earlier this week, the Ifo business confidence, a widely-watched business climate index released by the Munich-based economic institute, dropped to 105.3 pts in June from 106.9 in May.
The recent surge in uncertainty in the Eurozone is impacting the German economy, while companies' assessments of their current business situation brightened slightly, they scaled back sharply their expectations for the next six months, Ifo president Hans-Werner Sinn said.
The Ifo index is calculated based upon a monthly survey of some 7,000 companies' assessments of their current business and the outlook for the next six months.
Meanwhile, its outlook measuring current business slid down to 97.3 points in June from 113.2 pts in May, the lowest level since October 2011.
Manufacturing sector also suffered a severe setback from the poor export outlook, while the retails and construction, which are aimed at the German domestic market, improved slightly.
The shedding Ifo indices were reflections of waning market confidence over Germany's economic prowess to save Eurozone from the engulfing crisis.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.