ECB’s Bond Purchases Steady Markets

Spain continued to insist that a closer fiscal union was necessary, but Germany denied any such action was necessary, with a spokesman for Chancellor Angela Merkel telling a news conference, “There are no plans and there is no desire for a joint fiscal policy.”

Despite that, the euro was steady and European markets edged up in early trading. However, by markets’ close stocks had dropped back a bit in the wake of the U.S. jobs report showing higher unemployment numbers than expected. The euro remained steady, but concerns about the job situation in the U.S. were reflected by the new highs hit by gold as it topped $1,400 per ounce, closing at $1,408.

Standard & Poor’s was not impressed with Germany’s stance, citing that nation’s position on making bondholders share the cost of any defaults as one reason it may cut Greece’s BB+ rating in three months. European Union (EU) finance ministers had issued a statement saying that any rescue loans extended in the future would have precedence over all other creditors except the International Monetary Fund (IMF). That, said S&P, lessened the possibility of private bondholders to recoup investments in case of other bailouts. Trichet has expressed concern about such a policy and on Friday said EU governments must say outright that they will not look for "haircuts" and debt restructuring as a condition for providing assistance.