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Rumors, rumors and more rumors on euro-debt summit
10/20/2011 11:58 am EST
So what’s it gonna be?
This morning I’ve read or heard that the summit schedule for this weekend will be postponed—denied minutes later by the Austrian finance ministry. (Is the Austrian finance ministry a reliable source? Who knows?)
That France and Germany are at loggerheads. (Haven’t seen anybody denying that.)
That the Finns will kill just about any deal. (I‘m petty sure that the Finns will oppose almost any deal—but kill everything?)
That the ongoing meeting of finance ministers is near to brokering a compromise between France and Germany and we will still get a grand plan out of this weekend’s emergency EuroZone summit that can then go to the G20 meeting on November 3 and 4. (Seems unlikely—but you never know.)
And that this weekend’s meeting will cobble together some inadequate but face-saving plan that quite probably won’t be far advanced from the general statement of goals for fixing the crisis advanced by the French later this week. (That strikes me as increasingly likely since the major sticking points—whether to leverage the European Financial Stability Facility beyond its current $600 billion size and how to do it—will be very tough to negotiate in the time remaining.)
The big question for the financial markets is Has the bar now been set so low by a week of chaos that even an inadequate plan will be a relief? It would be better than no plan at all, right?
I don’t know although I’m nudged in that direction by the market’s performance this morning. As of 11:20 a.m. New York time the Standard & Poor’s 500 Stock Index was down just a little less than 5 points to 1205.
Considering the chaos and the unnerving volume of rumors today that’s actually encouraging.
On the other hand, maybe the markets just can’t believe that European leaders will blow this one so badly. (Although on their track record, I don’t see why the markets wouldn’t believe just that.)
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