Dominated negative obvious trading last week, especially with the International Monetary Fund to reduce the outlook for global economic growth, and download Europe responsibility difficult economic conditions present, and ratified vision during the week's transactions by the Standard & Poor's cut the credit rating of sovereign debt in Spain to become the top step One of the levels with a high risk.
Incurred European stock markets and the euro significant losses after the cut IMF growth forecasts for the world economy as a result of the escalation of European sovereign debt crisis and warned of growth rates is weak in the United States and in Europe in the left decision-makers are unable to take policy stimulus appropriate.
UNFPA reduced growth prospects in the euro zone contraction this year when -0.4% to return the economy to grow slightly at 0.3% over the next year, and the Fund pointed out that the euro zone economy will remain unstable until their leaders to take further action serious and tangible to fight debt crisis, which is the first priority at the moment.
The most important event and the largest this week was reducing the credit rating of sovereign debt long-term Spain confirmed weak outlook for the Spanish economy in light of confusion in the decisions of the European region and the European Central Bank, was downgraded sovereign debt in Spain to BBB-after it was BBB +, in While the agency continues to maintain a negative outlook for the future of the Spanish economy, and the classification of short-term sovereign debt has also been reduced by the agency to become when A-3 from A-2.
The firm said that the tension between the local governments and the central government is increasing, which reduces the chances of finding solutions to the financial crisis in the country., As are likely to face the country's contraction in gross domestic product rose 1.2% in 2012 and 1.4% in 2013, and that the contraction of the private sector and austerity government will lead to further contraction in investment and domestic consumption in the two sectors.
European markets resumed their recovery after the decline witnessed following the reduction of the Spanish with the hopes that the country will request a bailout with the increasing pressure on the government that this credit reduce the half-life of the Spanish sovereign debt is the main threat to exit the country in the bond markets.
Expected to be Spain's first European country to benefit from the European Fund Permanent (European Stability Mechanism) which was launched by the euro zone finance ministers during their monthly meeting in Luxembourg on Monday with a capital of up to about 500 billion euros, which will replace the Financial Stability Fund temporary lending nations stalled in the euro area for the implementation of fiscal and structural reforms strict to restore investor confidence.
Ministers agreed in Ecofin that Spain does not need to program aid, at a time when lead by the State all necessary in fiscal policy and structural reforms. "And added Minister that if made Spain a request for further assistance in addition to 100 billion euros have been allocated in advance to re- capitalized banks will discuss the request.
But Greece, gave ministers Greece until October 18 (the date next to the summit European) to show its determination to promised reforms in return for the second installment $ 31 billion euros of loan rescue the second, and this was announced by Chairman of the Group ???????? Jean-Claude Juncker yesterday evening.
At the same time the ministers agreed to exchange a new batch of bailout loans package planned for Portugal as well as increase the grace period given to Lisbon in order to reduce the budget deficit to the target level by an additional year until 2014.
Within the events that took place during the week Merkel's meeting with Samaras, who is the first since the outbreak of the credit crisis in 2009, and German Chancellor welcomed the efforts made in the implementation of fiscal and structural reforms strict.
