{"id":1046,"date":"2012-06-18T06:00:00","date_gmt":"2012-06-18T06:00:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/06\/18\/viewpoint-two-crucial-weeks-for-the-euro-area-debt-crisis-lie-ahead\/"},"modified":"2012-06-18T06:00:00","modified_gmt":"2012-06-18T06:00:00","slug":"viewpoint-two-crucial-weeks-for-the-euro-area-debt-crisis-lie-ahead","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/viewpoint-two-crucial-weeks-for-the-euro-area-debt-crisis-lie-ahead\/","title":{"rendered":"Viewpoint:  Two crucial weeks for the euro area debt crisis lie ahead."},"content":{"rendered":"<p style=\"text-align: justify;\">The main events are listed below. Two and a half years into the crisis,   and after a string of \u201chistorical\u201d deals which only yielded buffer   measures, there is considerable hesitancy in defining the next two weeks   as \u201cdecisive\u201d for the future of \u2026.<strong> <\/strong> <strong> <\/strong><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<hr \/>\n<p> Sign up for our free newsletter to receive weekly news from BONDWorld<br \/> <a href=\"index.php?option=com_acymailing&#038;view=user&#038;Itemid=107\"><strong>Click  here to register for your free copy<\/strong><\/a><a href=\"index.php?option=com_acymailing&#038;view=user&#038;Itemid=1023\"><strong> <\/strong><\/a>  <\/p>\n<hr \/>\n<p style=\"text-align: center;\"><strong>For professional investors and advisers only<\/strong><\/p>\n<hr style=\"text-align: justify;\" \/>\n<div style=\"text-align: justify;\">the  euro area. Italy and Spain had already come under fire in the summer of  2011, when they were saved by the expansion of the ECB\u2019s securities  market programme. Cyprus is too small for its rescue needs to represent a  real problem. The main difference today is represented by the risk that  a Member State, namely Greece, could take political decisions resulting  in its exit from the Monetary Union.<\/div>\n<p style=\"text-align: justify;\"><strong>The first crucial event of the week, therefore, will be the political elections in Greece on Sunday, 17 June.<\/strong> While exit polls and projections will be available already on Sunday  evening, uncertainty could drag on for days. However, Greek politicians  simply cannot afford to engage in long negotiations, given the risk of  an implosion of the financial system, and the government\u2019s liquidity  restraints. It should be stressed that a favourable outcome,  guaranteeing the highest level of continuity, such as the formation of a  government formally committed to pushing ahead with the economic  consolidation programme, would not solve all the problems on the table:  not least because unfreezing any of the residual tranches of the bailout  package remains subject to the veto of individual Member States. A  spiralling of the crisis will probably be countered through the adoption  of special measures by central banks, that would surely include  extraordinary refinancing operations; however, there is no certainty  that purchases of securities through the SMP would also be added,  despite the fact that Spain has already scheduled auctions of Letras and  Obligaciones on 19 and 21 June respectively: these will be covered  through the usual collaboration of local banks.<\/p>\n<p style=\"text-align: justify;\"><strong>On 18-19 June, the G20 meeting will follow.<\/strong> Confirmation is expected that the IMF will step up the resources made  available by 430 billion dollars, to around 800 billion. A year ago,  this move, plus EUR 500 billion of lending capacity in the European  funds, and the adoption of flexible intervention modes such as primary  market intervention, could have positively impacted confidence on the  market; today, on the other hand, the announcement is unlikely to make  much difference. Coordinated central bank actions in support of  liquidity could also be announced, probably already defined as part of  the contingency plans drawn up in recent weeks. Lastly, non-European  countries will continue to exert pressures on Germany.<\/p>\n<p style=\"text-align: justify;\"><strong>The third crucial event will be represented by the meetings of the Eurogroup (21 June) and of Ecofin (22 June).<\/strong> The meetings should provide a good opportunity to understand whether  the proposal made by euro area leaders on the roadmap towards  integration stands any chance of being accepted, and what its contents  will be. The European Parliament\u2019s recent vote on the new rules proposed  by the Commission on control over national balance sheets revealed vast  support for a greater integration of the euro area, to include the  common issue of Treasury bonds. However, on many topics unanimous  consent is necessary, and Germany\u2019s approval in particular: as Mr. Monti  reminded a few days ago, in the European Union it is much easier to  block an initiative than to have one approved.<\/p>\n<p style=\"text-align: justify;\"><strong>The remaining issues will have to be solved the following week at the European Council of 28- 29 June<\/strong>.  For the time being, the program only includes the sharing of a \u201cEU  growth agenda\u201d and the approval of recommendations to Member States  within the framework of the European semester, but clearly stronger  commitments are also expected, towards the building of a more integrated  economic and monetary union. If the finance minister meeting lays bare  disagreements and resistances, the run-up to the summit is likely to  prove very turbulent, even in the event of the Greek elections resulting  in miraculous harmony. The importance of the results will also have to  be assessed in light of the leeway they will allow the ECB, which in the  present phase of the crisis is the only institution with the power to  keep the euro area on its feet during acute phases of the emergency.<\/p>\n<p> <\/p>\n<hr \/>\n<p> <strong>Appendix<br \/><\/strong> <\/p>\n<p style=\"text-align: justify;\"><strong>Analyst Certification<\/strong><br \/>The  financial analysts who prepared this report, and whose names and roles  appear on the first page, certify that: (1) The views expressed on  companies mentioned herein accurately reflect independent, fair and  balanced personal views; (2) No direct or indirect compensation has been  or will be received in exchange for any views expressed. Specific  disclosures: The analysts who prepared this report do not receive  bonuses, salaries, or any other form of compensation that is based upon  specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This  research has been prepared by Intesa Sanpaolo S.p.A. and distributed by  Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the  London Stock Exchange) and Banca IMI Securities Corp (a member of the  NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for  the contents of this report. Please also note that Intesa Sanpaolo  S.p.A. reserves the right to issue this document to its own clients.  Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo  Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both  authorised by the Banca d&#8217;Italia, are both regulated by the Financial  Services Authority in the conduct of designated investment business in  the UK and by the SEC for the conduct of US business.<br \/>Opinions and  estimates in this research are as at the date of this material and are  subject to change without notice to the recipient. Information and  opinions have been obtained from sources believed to be reliable, but no  representation or warranty is made as to their accuracy or correctness.  Past performance is not a guarantee of future results. The investments  and strategies discussed in this research may not be suitable for all  investors. If you are in any doubt you should consult your investment  advisor. <br \/>This report has been prepared solely for information  purposes and is not intended as an offer or solicitation with respect to  the purchase or sale of any financial products. It should not be  regarded as a substitute for the exercise of the recipient\u2019s own  judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities  accept any liability whatsoever for any direct, consequential or  indirect loss arising from any use of material contained in this report.  <br \/>This document may only be reproduced or published together with the  name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo  S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management  Policy for managing effectively the conflicts of interest which might  affect the impartiality of all investment research which is held out, or  where it is reasonable for the user to rely on the research, as being  an impartial assessment of the value or prospects of its subject matter.  A copy of this Policy is available to the recipient of this research  upon making a written request to the Compliance Officer, Intesa Sanpaolo  S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has  formalised a set of principles and procedures for dealing with  conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is  clearly explained in the relevant section of Banca IMI\u2019s web site  (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or  their directors and\/or representatives and\/or employees and\/or members  of their households, may have a long or short position in any securities  mentioned at any time, and may make a purchase and\/or sale, or offer to  make a purchase and\/or sale, of any of the securities from time to time  in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and  circulates research to Qualified Institutional Investors in the USA only  through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167  New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This  document is intended for distribution only to professional investors as  defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a  printed document and\/or in electronic form. Person and residents in the  UK: This document is not for distribution in the United Kingdom to  persons who would be defined as private customers under rules of the  FSA.<br \/>US persons: This document is intended for distribution in the  United States only to Qualified Institutional Investors as defined in  Rule 144a of the Securities Act of 1933. US Customers wishing to effect a  transaction should do so only by contacting a representative at Banca  IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading  Ideas are based on the market\u2019s expectations, investors\u2019 positioning  and technical, quantitative or qualitative aspects. They take into  account the key macro and market events and to what extent they have  already been discounted in yields and\/or market spreads. They are also  based on events which are expected to affect the market trend in terms  of yields and\/or spreads in the short-medium term. The Trading Ideas may  refer to both cash and derivative instruments and indicate a precise  target or yield range or a yield spread between different market curves  or different maturities on the same curve. The relative valuations may  be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa  Sanpaolo S.p.A. trading ideas are made in both a very short time  horizon (the current day or subsequent days) or in a horizon ranging  from one week to three months, in conjunction with any exceptional event  that affects the issuer\u2019s operations. In the case of a short note, we  advise investors to refer to the most recent report published by Intesa  Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation  methodology, earnings assumptions and risks. Research is available on  IMI\u2019s web site (www.bancaimi.com) or by contacting your sales  representative.<\/p>\n<p>Source: BONDWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The main events are listed below. Two and a half years into the crisis, and after a string of \u201chistorical\u201d deals which only yielded buffer measures, there is considerable hesitancy in defining the next two weeks as \u201cdecisive\u201d for the future of \u2026.<\/p>\n","protected":false},"author":2,"featured_media":3455,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[50],"tags":[],"class_list":["post-1046","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-weekly-analysis"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=1046"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1046\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3455"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=1046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}