European debt crisis: Austria votes on euro rescue deal
The Austrian parliament will debate the expansion of the European financial stability facility, after Germany yesterday became the latest country to back the plan
8.09am: Europe's stock markets have opened, and it's a sea of red electronic ink as most shares fall.
The FTSE 100 is down 62 points at 5133, around 1.2% lower. Similar losses in other markets, with the German DAX falling 1.5% and the French CAC down 1.2%.
Not major swings, but not terribly encouraging. The catalyst for the sell-off appears to be poor retail sales figures from Germany, which suffered their biggest fall in four years.
The Federal Statistics Office reported that retail sales, adjusted for inflation and seasonal swings, slumped 2.9% in August compared with July. That has increased fears that Europe's economic powerhouse is slowing down.
These monthly retail figures are notoriously volatile, but economists warned that the euro crisis has probably deterred many German consumers from splashing out on 'big-ticket' items.
As Christian Schulz from Berenberg Bank put it:
Germany will only fully enjoy higher domestic demand once this uncertainty is lifted.
7.58am: Here's the agenda for today's main events. As well as the political action, there's a clutch of important eurozone economic data
Austria starts debating the EFSF package - 10am CET (9am BST)
Eurozone consumer price index estimate for September - 11am CET (10am BST)
Eurozone unemployment rate for August - 11am CET (10am BST)
George Papandreou and Nicolas Sarkozy meet in Paris - 5pm CET (4pm BST)
7.47am: Political analysts are pretty confident that Austria will approve the EFSF expansion, as the ruling coalition has a healthy majority (it holds 108 out of the 183 seats in parliament).
Reuters has the details:!
The Social Democrats and their conservative People's Party coalition partners support the plan and need only a simple majority in the lower house.
Nearly all members of the opposition Greens will also vote for the step, party finance spokesman Werner Kogler said, while far-right opposition parties oppose further bailouts in principle.
If the EFSF is increased to 440bn then Austria's contribution would almost double to 21.6bn euros, from 12.2bn.
Last month, there was a brief wobble in the markets after an Austrian committee refused to fast-track the EFSF approval vote.
7.31am: Good morning. Today, it's Austria's turn to vote on the proposal to expand the European financial stability facility, and hand it new powers to help contain the euro crisis.
For Greece, it's another day of attempting to persuade international lenders to disgorge the next chunk of bailout cash. Prime minister George Papandreou is expected to meet with France's Nicolas Sarkozy later today.
Japan has responded to the crisis overnight by intervening in the currency markets again - more details to follow.
And in the City, investors are still caught between hope and fear, with the FTSE 100 expected to drop a little this morning. With London basking in a little heat wave today, traders may not be in the mood for anything too energetic. Can we expect a quiet day on the trading floors?
Comments