Fear not for the eurozone, says the German finance minister. Any talk of a break up of the eurozone is absurd, Herr Steinbrueck says. (That is until German taxpayers are called upon to bailout Greece. Then it won’t be absurd.)
He rightly points out that pressures on eurozone debt have eased in recent days, with bond spreads closing from record levels, though they still remain extremely wide between Germany and the likes of Greece, Spain and Ireland. In a currency union, “convergence” is the key assumption, with all countries having similar credit profiles. Not so in the eurozone amid these times of stress.
EUR/USD has dipped back from the 1.3000 level and trades now at 1.2967.
