14.08 Emotive language from Mr Wilders:
14.01 Holland's austerity package is "bad for the Netherlands" he insists (Wilders said last week that his party would not allow Dutch citizens to “pay out of their pockets for the senseless demands of Brussels").
Geert Wilders arrives for a debate about the government's resignation caused by a crisis over budget cuts on Tuesday (Photo: Reuters).
13.59 Far-right Freedom Party leader Geert Wilders is speaking now.
13.35 Follow think tank Open Europe on Twitter for more live updates from Holland. You can also watch the debate live here.
13.21 Meanwhile, Stephanus Blok, a member of Mr Rutte's VVD party, criticised the government for spending too much money, and Alexander Pechtold of Holland's Democraten 66 party picked-up on Mr Rutte'scomments that talks had stalled for seven weeks, declaring that one and a half years had been wasted on all talk and no action.
13.14 A debate in the Dutch parliament is underway.
Mark Rutte, who was the Dutch PM until yesterday, told legislators that his resignation was unavoidable after seven long weeks of talks. He added that the country could not afford to stand still, and that he hoped political parties would work together to help Holland through difficult circumstances.
13.08 Spain is in "an extremely fragile moment" as a country, and must implement austerity measures if it is to overcome the crisis, its Treasury minister has declared. Cristobal Montoro told parliament:
We are in an extremely delicate moment as a country, an extremely fragile moment as a country [...] This is the most austere budget since democracy, and it is aimed at being the most realistic that Spain needs to overcome this crisis situation.
11.36 Meanwhile, German Chancellor Angela Merkel has said that enforcing budget discipline is the "primary" challenge faced by Europe's policymakers, though austerity isn't the only solution to the crisis. "We’re not saying that saving solves all problems," she said, adding that "we have to get back to [the] situation" where low-debt is the norm.
German Chancellor Angela Merkel walks past guests on her way to the podium to speak during a meeting on the government's demographic strategy at the Chancellery in Berlin on Tuesday (Photo: AFP/Getty).
11.29 David Ruffley - the chap who has just stormed out of the TSC hearing, is the same Mr Ruffley who was hit by a train in 2010 an apparent suicide attempt.
10.53 Mr Provopoulos also said that deposits in Greek banks had declined by €70bn since the end of 2009. He added:The restoration of confidence could initially restore €10bn to €15bn in deposits.
10.45 Greece's central bank governor predicts that the economy will shrink by 5pc this year, compared with previous estimates of a 4.5pc contraction.
George Provopoulos told bank shareholders this morning that Greecehad no room for complacency, and warned that the country must stick to its guns and implement austerity measures - or else. He said:
If following the election doubts emerge about the new government and society's will to implement the programme, the current favourable (!!!) prospects will reverse.
10.06 While I've been bleating on about Holland, Spain has seen its borrowing costs double at two short term debt auctions this morning.
The average interest rate at an auction of three-month Treasury bills was 0.634pc, up from 0.381pc at the last auction. Six-month debt attracted average rates of 1.580pc, compared with 0.836pc a month ago.
However, appetite for Spanish debt remained strong. Demand outstripped supply in the three-month auction by a ratio of 7.6 to one.
09.59 Gavan Nolan at Markit has compiled a graph for us that shows how the cost of insuring Dutch debt against default has risen over the past six months. As the chart shows, until last autumn, insuring Dutch debt against default was cheaper than insuring UK or German debt.
Oh how times have changed.
Dutch credit default swap (CDS) spreads are currently trading at 135 basis points. This means it costs £135,000 a year over five years to insure £10m of Dutch government debt, compared with £91,000 forGermany.
09.53 Dutch borrowing costs have eased following the auction. Benchmark 10-year yields are down by 4 basis points at 2.367pc, while yields on two-year debt are down by .
09.42 Commenting on the auction, one trader told Reuters:
This is a good result in the circumstances. It looked bad yesterday but they managed to sell this in a couple of minutes [...] Especially selling 1 billion euros of the long-dated bond is a good sign.
09.19 Demand looks strong. Steve Collins, head of dealing at London & Capital Asset Management, offers further insight:
09.14 The results of the Dutch bond auctions are in. The country sold almost €2bn of its €2.5bn target at two separate auctions.
The country sold €1bn of two-year debt at average rates of 0.523pc, and almost €1bn of 25-year bonds at average yields of 2.782pc.
It's hard to find comparisons, but at its last auction of 30-year debt in March, the Dutch government paid average rates of 1.37pc.
08.36 Geert Tomlow, former member of the Dutch right wing PVV party, which has brought down the country's government by refusing to back an austerity budget, admitted on Radio 4's Today programme:
Holland has fallen into its own trap.
He said the Dutch in the past had demanded strict austerity inGreece and other struggling eurozone economies to meet a 3pc deficit target but now had to concede that they can't meet the target either.
Mr Tomlow said that the Dutch people had seen the country spend money on Greece and other ailing economies and were asking "who's helping us?".
He added that the eurozone may have to have introduce a northern and southern euro - or even split into three - to cope with the current crisis.
08.15 The Netherlands faces a mini-test this morning at two auctions of medium and long-term debt. Yesterday, benchmark borrowing costs rose by 0.1pc as rumours of Dutch PM Mark Rutte's resignation became reality.
The Netherlands currently has the highest borrowing costs of all Europe's AAA-rated countries. Yields on 10-year bonds are currently at 2.412pc, compared with 1.659pc for Germany, 2.137pc for Norway, 2.136pc for the UK and 0.701pc for Switzerland.
Moody's said yesterday that the developments were "clearly credit-negative for the Dutch sovereign given that it generates both political and policy uncertainty," though the ratings agency highlighted that "the Netherlands is entering this testing period from a position of relative strength."
In January, ratings agency Standard & Poor's affirmed the Netherlands'AAA credit rating, but said there was a one in three chance it could cut the country's rating by the end of 2013:
...if we see that public finances deviate in a significant and sustained way from the planned 2012-2015 budgetary consolidation path due to a prolonged decline in growth. If the general government net borrowing requirements were to consistently exceed 3% of GDP per year in the medium term, we could lower the fiscal score, which could, in turn, trigger a lowering of the rating.
07.48 As the focus shifts to tensions in the Netherlands, Spain andFrance, events in Greece may have turned into a sideshow, but some still believe their days in the eurozone are numbered. Last night, the head of respected German think-tank Ifo said that Greece should exit the eurofor its own good.
Hans-Werner Sinn said:
I personally believe there's no chance for Greece to become competitive [while] in the eurozone. If Greece is kept in the eurozone, there will be ongoing mass unemployment. But if they exit, they will see a very sudden recovery.
Greek voters will head to the polls on May 6.
07.35 While Bruno Waterfield, the Telegraph's Brussels correspondent, has more detail on the resignation of the Dutch government:
Early elections, as early as June 27, will become a popular vote on EU imposed austerity measures after the fall of a Dutch government that over the last year strongly backed the eurozone’s fiscal union treaty and urged that Greece be stripped of sovereignty for falling behind with spending cuts.
Mark Rutte, the Prime Minister, resigned after his fragile liberal-conservative coalition government, which has a no parliamentary majority, fell apart at the weekend after the far-right Freedom Party walked out of talks to implement £12 billion (15bn euros) in cuts.
“The government now knows that it is no longer sufficiently assured of the necessary parliamentary support to do what is necessary for our national economy,” he admitted in his resignation letter to Queen Beatrix
Bruno also included a lovely piece of semantics from the European Commission, which is relaxed about the Dutch government's collapse despite the jolt it has given the markets. It said:
No comments:
Post a Comment