Markets in spin as anti-bailout party rises in Greek polls and Spanish borrowing costs soar
Madrid government forced to deny plan to bail out troubled bank with state cash
A day after markets in Europe were calmed on news that Greece's pro-bailout New Democracy party appeared to be pulling clear in the polls ahead of next month's crunch general election, new polls yesterday threw the situation back into doubt after suggesting the vote was back on a knife-edge.
Three new polls painted a confusing picture of what might happen in Greece, ahead of next month's election, which may decide whether or not Greece remains in the euro.
Of three polls published, one showed Greece's biggest pro- and anti-bailout parties, New Democracy and Syriza, in a dead heat, Reuters reported. Another put New Democracy ahead and a third suggested that the leftist Syriza party would win if elections were held now. The contradictory forecasts are likely to unsettle markets and politicians who fear that a win by Syriza, which has said it wants to remain in the euro but ditch the austerity measures the country has been prescribed, would force debt-laden Greece out of the single currency.
The turbulence was not restricted to Greece. The beleaguered Spanish economy took another blow yesterday as the country's borrowing costs soared to their highest level for a decade and the Madrid stock market briefly sank to a nine-year low.
As the markets gyrated, Spain's Economy Minister, Luis de Guindos, was forced to deny the existence of secret plans to bailout the troubled lender Bankia by using government bonds.
Yields on Spanish 10-year bonds peaked at 6.67 per cent, before falling back to 6.55 per cent, only slightly further from the seven per cent "point of no return" where other countries have asked for an international bailout.
Mr De Guindos, meanwhile, flatly denied a Financial Times report yesterday, which claimed the European Central Bank had rejected a plan for Spain to pay for a €19bn (£15bn) bailout of Bankia, the country's fourth largest bank, with government bonds.
Elsewhere attention turned to a possible German plan to relieve the European debt crisis by splitting the debt of struggling states. Drafted by the German Council of Economic Experts, the scheme would hive off the excess debt burdening countries on continent's periphery into a special fund. This fund would be covered by collective bonds – offering a twist on the so-called "Eurobonds" thus far opposed by the German Chancellor, Angela Merkel.
Countries would, however, have to pledge their gold reserves as collateral, according to reports. Once in place, the excess debt would be retired gradually, as troubled nations focus on getting their economies back on track.
- 1 Al Pacino on suffering from depression: 'It can last and it's terrifying'
- 2 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 3 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Perez Hilton apologises for publishing Jennifer Lawrence naked photo leak
Jennifer Lawrence 'nude photo hacker' claims there are hundreds more celebrity images to be published
Victoria Justice on naked photo leak: 'Let me nip this in the bud right now – pun intended'
Saudis risk new Muslim division with proposal to move Mohamed’s tomb
Ariana Grande nude photos leak: Pictures are completely fake, say singer's representatives
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
£50 - £130 per day: Randstad Education Chelmsford: Are you an SEN Teacher or L...
£30000 - £35000 per annum + benefits: Ashdown Group: A highly successful organ...
£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...
£50 - £70 per day: Randstad Education Chelmsford: Are you a Teaching Assistant...