Spain is about to go through five critical trading days, which could heat up a summer that´s already scorching the euro. This Friday the publication of recent stress test will show how our system is holding up.
Since Monday the price of Bankia IPO price has been fixed, and there is an upcoming treasury sale and the stock market debut for Banca Cívica. After all the pending market speculation that is influencing summer investing in Spain, there is some speculation on the euro and the possible PIIGS domino effect.
Yesterday all indicators of the Spanish risk premium were at a level-red threat, as were the rest of its companions in the European debt crisis. Only a rumor of peripheral country bonds sales by the ECB (European Central Bank) calmed down the CDS, the risk premium and the falling stock market. France´s plan to refinance Greece, a sort of planned demolition of their debt that would offer Greece some hope.
Because the French restructuring plan shows some financial savvy, the rating-company hangmen would incorporate a default, which the EU wants to avoid. From there the proposal of Germany´s thesis to exchange some shares for other long-term shares at a loss, which would reduce the burden on Greece and enable its economic stability, but would affect various countries and involved firms.
And risk would be contagious. Nonetheless, the managers of the euro keep holding meetings, talking about plan phases and engaging in debates. All of which show that they are being stubborn about the ECB?s latest effort and letting everything run amok.
Translated and Edited in English by Brandon Dyches and Jose L. de Haro
