Euro Crisis

September 6th, 2012

Monday morning proved a good start to the week for Europe regarding the stock market. This was the second day of a significant rise of stocks. Further stimulus efforts are in the works, as is growth from the central banks.

The shares in Spain climbed for its best gain in two weeks. IBEX 35, Spain’s stock market index, went up .22 percent, which proved good news as it is fighting to avoid the same fate as Greece. France’s CAC 40 index went up .61 percent, London’s FTSE index .30 percent, and Germany’s DAX 30 index went up .23 percent.

Policy makers will have to follow up with this good news, ensuring they will take the necessary steps to keep the stimulus going.

Investors are raising speculation of Greece as meetings are to be held there this week to consider matters needed to take into control for the country. The country has faced a shrink in the economy to 6.2 percent as compared to the period of last year.

The European Central Bank’s plan to buy more bonds might not be enough according to market specialists, as matters in some countries are headed for continual faltering. The economies of Spain and Italy are also in main focus because of their borrowing costs rising each day. The potential purchased bonds will raise expectations on a reduction of these borrowing costs given by the central banks.

The chairman of the Federal Reserve, Ben Bernanke, said that he would not rule out further stimulus efforts for Europe.

Europe’s crisis is on a thin line and there will be two essential meetings this week to put things into perspective. Italy’s prime minister Mario Monti will greet Francois Hollande, the president of France, in Rome. Germany’s chancellor Angela Merkel, met with the European Union president, Herman Van Rompuy, in Berlin as well on Tuesday. These meetings were held to discuss the central banker’s agreement to defend the Euro from a possible bond-market disaster.

Merkel addressed a crowd with attention on the face that Germany would plan to show solidarity with Europe and has agreed to present an important position in fighting Europe’s crisis at the ECB.