Stocks down after Merkel and Sarkozy talks
PR dla Zagranicy
Peter Gentle
17.08.2011 11:45
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Poland has little political clout as to Eurozone matters, says Marcin Sobczyk from Dow Jones Newswires. Audio report by John Beauchamp
European stock markets, including the Warsaw bourse, were unimpressed by yesterday’s call by Chancellor Merkel and President Sarkozy for “a new economic government” for the Euro Zone in a new drive to manage the debt crisis.
German and French leaders in Paris, Tuesday; photo - EPA
The Warsaw Stock Exchange’s benchmark WIG 20 fell 1.37 percent against close of trading yesterday, following data showing the German’s economic growth – Poland’s main export destination – was not as dynamic as hoped by analysts.
The Deutsche bourse and London’s Stock Exchange Group lost three percent this morning.
French President Nicolas Sarkozy greeted German Chancellor Angela Merkel at the Elysee Palace on Tuesday where the leaders of the Euro Zone’s largest economies called again for a Europe-wide tax on financial transactions and pledged to harmonize their countries’ corporate taxes.
They proposed a “new economic government” where the 17 Euro Zone member states would meet under the leadership of EU president Herman van Rompuy.
The two leaders also called for Euro Zone nations to enact constitutional amendments requiring balanced budgets. They said they want the process completed by the summer of 2012.
Merkel said the goal should be to strengthen “the euro as our common currency” and to make this possible it is necessary to create “stronger engagement of financial and economic policies in the Euro Zone”.
No rabbits
Analysts generally saw nothing new in the announcements yesterday, however.
“The Sarkozy-Merkel meeting was the major event yesterday and anyone expecting a rabbit to be magically pulled from one of their hats would have been disappointed,” Jim Reid , a global strategist at Deutsche Bank AG in London, wrote in a statement following the talks.
Jerzy Osiatyński, economic advisor to Poland’s president Bronislaw Komorowski told Polish Radio this morning that a new “economic government” for the Euro Zone, as proposed by the leaders of the French and German governments, should be put in place before any introduction of a tax on financial transactions.
After wild fluctuations of late, he suggested that exchange rates could be stabilised by the introduction of the so-called Tobin tax, which would entailpenalizing short-term currency speculation, and to place a tax on all spot conversions of currency. (pg)
Audio by John Beauchamp