Last weekend the Spanish prime minister Mariano Rajoy made a bailout deal with the EU to secure the banks in Spain. This move was in the very beginning welcomed from all sides, but short after markets reacted negatively, and yesterday Spain received another slap in the face. The rating Agency Moody’s downgraded the Spanish government debt with three notches because the deal will increase the country’s debt burden. Also Cyprus was downgraded further in their already junk status in Moody’s black book.
In just three days the Greek elections is to be held, and yesterday the french president Francois Hollande warned the Greek voters that if the country does not keep it’s commitments after the elections some of its eurozone partners will want it out of the block – underlining that this isn’t his will. Hollande wants Greece to continue in the eurozone. In Greece the situation is tense, and the Greeks are now pulling their money out of the banks and stock up with food in their preparations for the election on Sunday. BBC has made this info graphic of what is at stake in the Greek elections.
Several EU leaders are now pushing for further integration of the EU leading up to the Greek election and the EU summit later this month. The suggestion has its roots in Germany, but are now being backed from both the new French president, Francois Hollande, and the president of the EU commission, Jose Manuel Barroso. Barroso is expected to put together a master plan for further integration beginning already in 2013 that he will present at the EU summit. These messages also comes just before the EU will be confronted at the G-20 summit in Mexico, where the eurozone crisis will top the agenda.
EU will also participate in another global summit – the Rio+20 Global Earth Summit in Rio, Brazil. So far the negotiators from the European Union are skeptical. “It will be very, very difficult to draw up concrete measures and fix dates,” one negotiator told AFP. France has a dream that the environmental summit could agree on a World Environment Organization. This is one of the dreams that the negotiators already before the summit has begun are ready to kill.
Few good news, though. Ireland is on track with their bailout program. The International Monetary Fund yesterday released €1.4 billion to Ireland saying that Ireland’s implementation of reforms under it’s three-year rescue loan program has been “steadfast”. This release of the loan brings the total amount of money lend from IMF to Ireland up at €18,2 billion.