BLEAK OUTLOOK FROM LONDON FOR EURO - The head of research at stockbrokers Charles Stanley in London, Jeremy Batstone, says he believes the euro zone crisis continues to spiral out of control, despite news yesterday of Ireland's €85 billion IMF/EU rescue deal. He says the increased level of comments that come from euro zone and IMF officials are serving only to increase the level of distrust in the markets. He warns that Greece, Ireland, Portugal and even Spain might still default despite yesterday's bail-out. He states that a debt crisis can not solved by pouring in more debt.
Mr Batstone says the main difficulty affecting the euro zone is the fact that the problems in Greece were not fixed properly and the Greek crisis still threatens to take down the weaker financial institutions worldwide. He says that if we had seen a proper debt restructuring in Greece - similar to solutions found to problems in Latin America - and if bondholders had taken a partial haircut, Ireland would not have needed a bail-out. He says that the Irish Government has done quite well with the fiscal austerity programme, but the Irish banks remain a problem. He says that the reckless investors should bear some of the burden of the banks' problems.
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MORNING BRIEFS - France and Germany are determined to save the euro currency and will not allow it to be taken hostage by the markets, French government spokesman Francois Baroin said this morning. He told French radio that it 'is necessary for everyone, investors, to understand Europe's message: we will save the euro. It is an instrument which will not be taken hostage'
*** Two Irish banks, Bank of Ireland and Irish Life and Permanent, said they will seek to raise money independently to increase their financial strength rather than having to accept more government money.
*** On the currency markets, the euro is worth $1.3279 and 85.13 pence sterling, up from earlier lows.
