FXstreet.com (Barcelona) – There has been a bunch of headlines coming from the EZ FinMin meeting briefing, which commenced at 2.15 am Brussels time. Eurogroup head Juncker said they reached a “political understanding on Spain’ memorandum of understanding on bailout” aiming for formal deal on Spain by late July, as they confirmed there will be another meeting/conference call by July 20.
The loans to be used for Spain banks recap will have the maturity of up to 15 years. Maturity on Spain loans up to 50 years, Jucker said, also confirming 1-year extension for Spain to cut deficit. Juncker said: “We endorsed the extension of Spain deficit target by one year to 2014.” The extension is thought to be formally adopted at Ecofin Tuesday.
On Greece, there was no conclusive review of its program. While in possession of the preliminary briefing of the troika, they agreed to discuss Greece again once the full report of Troika is available. Touching on Cyprus program, Jucker said it will be finalized by end of Sept. Finally, Juncker said it aims to step down as Eurogroup Chairman by year end.
Meanwhile, EU’s Rehn said the comission will present draft on Spanish bank supervision by early Sept. Same time when work on direct ESM recap will start. Rehn “the ECB signed an agency agreement for the EFSF/ESM on interventions.” Rehn added that they aim to finalize Spain memorandum of understanding on bailout on July 20. He set Spain’s targets at 4.5% GDP deficit in 2013, 2.8% in 2014.
According to Rick Lloyd, Analyst covering the latest developments for IFR Markets: “No comment on ESM seniority & vague comments point to more delay, which will most likely prompt Spanish bond yields to edge higher on no breakthrough of ESM. Furthermore, likely German court action may force EU to rely on EFSF meanwhile.”
