DESPITE ANGER, GREEKS MUST ACCEPT AUSTERITY MEASURES - Stock markets were under pressure again yesterday as the release of €12 billion in aid to Greece was delayed and as various European countries row over the terms of a new Greek bail-out. Meanwhile the Greek government faces a confidence vote today, and if it survives parliament will be asked to back the latest spending cuts - worth €28 billion euro - on June 28. These austerity measures and other reforms have to be introduced before the European Union and International Monetary Fund release the funds.
Charles Forelle, of the Wall Street Journal in Brussels, says there is a lot of anger in Greece - both among the parliament and among the people - over the latest range of painful austerity measures, but the country has no choice but to implement them as it is running out of money and needs the next tranche of EU/IMF funds. However, the next few weeks' events are only part of a bigger question as the country needs at least another €100 billion on top of its original bail-out programme. Mr Forelle is just back from a week in Athens and said while he was there he did not come across any particular anger towards Europe. However the Greeks are very angry at their government for not making the bail-out programme work.
Mr Forelle says the euro zone's decision to change the terms of the European Stability Mechanism should ease Ireland's return to the bond markets. The change means that funds under the ESM will not have preferred creditor status when it helps countries that have already been bailed out. He says the change should make it easier to raise money in 2013 and 2014.
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MORNING BRIEFS - Haven Mortgages, which is the broker using subsidiary of EBS Building Society, reported a €6m loss for last year. It saw provisions for impaired loans more than treble to €17.3m over the year. Despite the rise in impairments, the overall loss was in line with 2009 because of a rise in income from interest. The company said interest income rose just over 15% to €34.3m mainly because of increased mortgage lending last year, and also because of an increase in mortgage margins.
In a statement, the company said that affordability levels for new homeowners were now at their highest levels in 25 years. Average mortgage repayments had fallen by 48% over the past three years to €639 a month. Haven's directors do not expect an economic recovery before 2013, and say they are cautious in their outlook for growth in the mortgage market.
*** Stock markets were under pressure again yesterday as euro zone finance ministers delayed the release of €12 billion in aid to Greece. European shares fell to a three-month closing low last night, with the Paris CAC closing 0.6% lower, and Germany's DAX index dropping 0.2%. London's FTSE 100 slipped 0.4%, and in Dublin the ISEQ closed 0.5% weaker. Overall, shares in banks were the worst hit, with major concerns about their liquidity and funding positions.
*** On the currency markets the euro is trading at $1.4345 cents and 88.4 pence sterling.
