European markets got a welcome lift in early trade on Wednesday. It followed the European Commission’s announcement that eurozone bonds would be introduced soon.
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Many investors see euro bonds as the only way to tackle the eurozone debt crisis. But Germany has been firmly opposed to them.
Robert Halver is from Baader Bank in Frankfurt.
“I guess that’s not a good sign, that’s a bad message for the markets because Germany in former times was a strong, strong factor in policy, in the European policy, and right now we have kind of a political crisis, even in Berlin.”
Moody’s downgrade of two French banks considered overexposed to Greece hit stocks early on.
But by early afternoon the FTSEurofirst 300 – the index of top European companies – was up 0.3%.
Germany’s DAX also got a lift – as did France’s CAC and the UK’s FTSE 100.
Few analysts were expecting a long-term revival, though, with no solution to the eurozone debt crisis.
Louise Cooper is from BGC Partners in London.
“Massive volatility, huge concerns, you know you can just lose so much money so quickly that investors and market players are highly nervous of these markets.”
Global markets have now been struggling since the end of July, largely due to the eurozone’s troubles and fears of recession in the United States. Investors are now looking for strong leadership from eurozone politicians to help end the volatility.
Bottom line: Proposals for a common eurozone bond brightened the mood in early trade, after comments from the European Commission.