‘Three fears for Europe’

Published on 4 July 2013 at 12:09

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With the political crisis in Portugal, “reality has overtaken all of the optimists” who believed the worst fo the crisis was behind us, remarks Handelsblatt

Until now, the saviours of the euro were held in suspense by the fires in Greece, Cyprus and Portugal, which flared up at different times. Today the fact that all of these problems have re-emerged at the same moment is very troubling.

The political crisis in Portugal prompted ”a 7 per cent fall on the Lisbon stock exchange” (although it recovered slightly to close the day only 5.3 per cent down) and the ”DAX [Frankfurt stock exchange] lost more than 2 per cent,” notes the business daily, which adds that markets have been unnerved at a time when “the Greek government is struggling with the troika to obtain payment of a further €8.1bn tranche of aid and Cyprus still needs billions” if it is to be rescued.

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Even ECB president Mario Draghi’s optimism “has evaporated”, remarks the daily, which argues that the programme for the unlimited purchasing of bonds issued by crisis stricken countries and the reduction of the key interest rate to 0.5 per cent will not be enough “to provide a definitive solution to the crisis”.

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