In the last hour, markets got rocked from some Merkel comments about her not being cool with debt and burden sharing for as long as she lives.
There was some confusion about what the comments meant, and since they were made at a meeting of her party, they weren’t necessarily for public consumption in whatever form she said them in.
The Merkel comments have dominated discussion over the last 15 minutes and there is some ambiguity with respect to what she meant
This latter point about ESM seniority is something that matters since one reason the Spanish bailout has been seen as so suspect is that the funds (if coming from the ESM) would supercede existing sovereign debt, thus threatening Spain’s market access.
If there’s something to this latter point, then this is a modest Euro positive.
- IT’S GAME OEVR!!! German Chancellor Merkel says Europe will not have shared liability for debt as long as she lives (investmentwatchblog.com)
- Debt Crisis: Merkel warns that shared debt liability within eurozone is ‘wrong’ (independent.ie)
- MERKEL: Europe Will Never Share All Of Our Debts For ‘As Long As I Live’ (businessinsider.com)
- Still no sign of cracks in Germany’s Iron Chancellor (itv.com)
- Merkel Says No European Shared Liability As Long As She Lives (zerohedge.com)