Another Eurozone meeting today discussing the budget for the 2014-2020 period. Tensions are high amongst the Euro area leaders with rumours swirling around of Veto’s, alliances, disagreements, power struggles you name it.
So far this week it has been another classic example of can-kicking by Europe in that they delayed making any decision on Greece receiving its next tranche of bailout money until Monday. It is likely we get something on it before Monday as its seems like a fairly aggressive schedule these ministers have over the next few days, the coffee percolators will be running overtime as ministers debate all these issues long into the night and I’m sure over the weekend.
Central issues are Cameron potentially vetoing decisions again as he is looking for spending freezes, smaller nations banding together as they are disgruntled that certain spending may be cut which they depend on, Hollande is looking to ensure the CAP payments stay as they are and I’m sure Greece will be wandering about doing all they can to get their next payment in the bank. It does seem that Cameron is perhaps quite a lonely figure in all this so it will be interesting to see if he gets any of what he wants.
The clock is ticking for Europe as if they do not reach an agreement soon then automatic mechanisms are to be enacted that match 2013 budgets which by accounts here are more costly than is desired. Similar situation to the US fiscal cliff automatic triggers but just a month or so longer in the timeline.
In other news slightly better data from China overnight in that their manufacturing PMI compiled by HSBC (so not the official one from the politburo, but often seen as more independent measure) came in higher than last month and importantly over the number of 50- (a physcological barrier for most). French and German PMI’s came in better this a.m also but well below that 50 barrier I mention. Fairly muted reaction from markets, as yet again we have a few more pressing matters to worry about. The single currency has kept its head above water this week in the face of two potential negatives in the Greek payments been delayed and the French downgrade of debt rating that I mentioned the other day. Neither are a “travesty” as we have been here before but just worth noting that it managed to shake off the bad news. Overall markets are quiet as it is Thanksgiving in the US so volumes will be low and all eyes will be on the outcomes from the Eurozone meeting over the coming days.