GERMANY: Spain fears send euro, shares lower.

Record ID: 644969

  • Title: GERMANY: Spain fears send euro, shares lower.
  • Date: 23rd July 2012
  • Summary: FRANKFURT, GERMANY (JULY 23, 2012) (REUTERS) WIDE OF DAX BOARD ON TRADING FLOOR TRADER WORKING ON HIS COMPUTER TRADER LOOKING AT COMPUTER SCREEN CLOSE OF DAX BOARD WIDE OF TRADING FLOOR TRADER TALKING ON PHONE CLOSE OF HAND MOVING COMPUTER MOUSE CLOSE OF DAX GRAPH MORE OF TRADERS CLOSE OF DAX BOARD TRADER LOOKING AT COMPUTER SCREEN CLOSE OF DAX BOARD (SOUNDBITE) (German) FIDEL HELMER, HAUCK & AUFHAEUSER, SAYING: "The Dax today started clearly lower due to the weak openings of other markets in Asia and America and of course also the weaker euro, caused by the new problems within the euro zone." TRADER (SOUNDBITE) (German) FIDEL HELMER, SAYING: "Greece didn't fulfil requirements set by the IMF (International Monetary Fund) and the European Union and asks for further extensions of the deadlines, which would cost another 40 to 50 billions and clearly neither the IMF nor the European Union are willing to spend more money on Greece." WIDE OF DAX BOARD (SOUNDBITE) (German) FIDEL HELMER, SAYING: "I think it is the right signal because the Greek are apparently not ready to do their homework and the Europeans are not ready anymore to spend more money. Greece seems to be a bottomless pit and the markets have feared this cut for a while. I think we will have regarding the issues concerning the markets, one less problem." TRADERS WORKING WIDE OF TRADING FLOOR
  • Embargoed: 7th August 2012 13:00
  • Keywords:
  • Location: Germany
  • Country: Germany
  • Topics: Economy
  • Reuters ID: LVAC4W4Y89WMJBISV6JZS3MIFYCW
  • Story Text: Germany's DAX opens low as new problems within the euro zone weaken markets.


    European shares fell and the euro hovered near multi-year lows on Monday (July 23) after two Spanish regions said they would need aid, reigniting fears the country will become the fourth euro zone member to need a full international bailout.
    Ten-year Spanish government bond yields rose to a fresh euro-era high of 7.55 percent after a second region said over the weekend it would ask for central government help to keep it afloat.
    "The Dax today started clearly lower due to the weak openings of other markets in Asia and America and of course also the weaker euro, caused by the new problems within the euro zone," Fidel Helmer from Hauck & Aufhaeuser told Reuters TV at the market opening in Frankfurt.
    Regarding the latest developments in Greece, Fidel Helmer said: "Greece didn't fulfil requirements set by the IMF (International Monetary Fund) and the European Union and asks for further extensions of the deadlines, which would cost another 40 to 50 billions and clearly neither the IMF nor the European Union are willing to spend more money on Greece."
    Athens wants to soften the terms of a 130-billion euro bailout agreed last March with the European Union and the International Monetary Fund, to soften their impact on an economy going through its worst post-war recession.
    "I think it is the right signal because the Greek are apparently not ready to do their homework and the Europeans are not ready anymore to spend more money. Greece seems to be a bottomless pit and the markets have feared this cut for a while. I think we will have regarding the issues concerning the markets, one less problem (if Greece leaves the euro zone)," he said.
    By the end of this year Greek GDP is expected to have shrunk by about a fifth in five consecutive years of recession since 2008, hammered by tax hikes, spending cuts and wage reductions required by two EU/IMF bailouts. Unemployment climbed to a record 22.6 percent in the first quarter.
    Athens must reduce its budget deficit below 3 percent of GDP by the end of 2014, from 9.3 percent of GDP in 2011 - requiring almost another 12 billion euros in cuts and higher taxes on top of the 17 billion successive governments have cut from the budget shortfall.
    Greece wants its lenders to give it two more years to achieve the budget goal to avoid an even deeper economic slump but its lenders have opposed the idea because it would imply even more financial aid.
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