Greek bank workers protest state bank sell out; markets open in Germany, Italy bond sale
(30 Jul 2012) STORYLINE Some 300 employees of Greece's state-run Agriculture Bank (ATEBank) launched a rolling 24-hour strike to protest against plans to privatise the bank. The strikers were joined by employees from the Hellenic Post bank as they gathered outside the Bank of Greece building in Athens. The government announced on Friday it would sell the ATEBank in a no-cash transfer to Piraeus Bank, with its weak investments remaining under state control. "The way it was done is a disgrace, it burdens the Greek tax payer," Kostis Amoutzias, Head of ATEBank Employees Union, said on Monday. Greek banks have been under growing pressure to merge since the start of the financial crisis in late 2009, the loss of assets in a massive state debt restructuring deal this year, and the country's ongoing severe recession. Greek banking shares rallied after the announcement by the government. And on Monday, hopes that Europe is readying some firm action to deal with its debt crisis continued to support sentiment across the European markets. Germany's DAX rose 0.6 percent to 6,730 while the CAC-40 in France was 0.5 percent higher at 3,295. The FTSE 100 index of leading British shares was up 0.4 percent at 5,648. The euro however gave up some of its recent gains, trading 0.4 percent lower at 1.2258 US dollars. Stocks, as well as the euro and the bond prices of Spain and Italy, have been buoyant since last Thursday's comments from European Central Bank president Mario Draghi that the bank is ready to do what it takes to preserve the euro. Those comments raised expectations that, at the very least, the ECB will ramp up its bond-buying programme in the hope of keeping a lid on Spanish and Italian borrowing rates. "We have been saying for weeks now that this is the week of truth for the Euro and it seems to be the case this week," said analyst Fidel Helmer in Germany "We heard from the head of the ECB that they will be buying as many Italian and Spanish Bonds as necessary, which was positive for the markets. For Italy and Spain that means lower interest rates which does help." The recent sharp rise in Spain's interest rates raised concerns that the 17-country eurozone did not have the capacity to bail out its fourth-largest economy, and raised the spectre of Italy needing financial help too. Italy on Monday won some respite as it managed to tap investors for 5.48 billion (b) euros (6.75 billion US dollars) with key borrowing rates lower than they had been previously. The Italian Treasury said the interest rates on its 5-year and 10-year bonds dropped in auctions on Monday. But the amount raised was slightly less than the 5.5 billion (b) euros sought. Demand was also a bit soft, with the offering only 1.3 times oversubscribed. Economist Nicola Borri said the auction results clearly showed that Italy and Spain needed the help. "Without the support of the ECB, Italy and especially Spain are almost out of the financial markets and so they are in deep trouble so definitely we need some support," said Borri, Economics Professor at Luiss University. Making sure that Spain and Italy can continue tapping financial markets for cash appears to be the priority of policymakers despite a warning from Germany's central bank, the Bundesbank, that the line between monetary and fiscal policy should not be blurred. In the days following Draghi's comments, politicians across Europe have added their voices to pledges of action for the eurozone. First came a joint statement from Angela Merkel of Germany and France's Francois Hollande, followed by another from Merkel and Italy's Mario Monti. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: / ap_archive Facebook: / aparchives Instagram: / apnews You can license this story through AP Archive: http://www.aparchive.com/metadata/you...
