François Hollande and Mario Monti issued a joint statement expressing a ritualistic determination to "do everything" to protect the euro and welcoming last week's statement by Mario Draghi, head of the ECB, to do the same within the bank's mandate.
Noting that some countries were facing excessively high borrowing costs despite imposing “difficult but necessary economic reforms”, the two heads of government called for rapid implementation of the end-June summit agreements that would allow Spain and Italy to apply for conditional intervention on markets by the eurozone bailout fund, possibly with ECB backing.
Nicholas Spiro, sovereign debt analyst, said the light at the end of the tunnel needed a credible backstop for Spanish and Italian debt, German support and a return to economic growth. “All three of these conditions are unlikely to be met any time soon. Unfortunately this is wishful thinking on Mr Monti’s part”, he commented.
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