Moodie Issued Ultimatum &Nbsp To Europe; The Market Looked Forward To The Ice Breaking Meeting Of The Finance Ministers.

Moodie, 28, issued a report warning that the European debt crisis continues to escalate and the possibility of multiple default in member states of the euro area can not be ignored. The splitting of the euro zone will damage the sovereign credit of the euro zone and the entire European Union and the credit rating of the European financial stability tool (EFSF).

Misfortunes never come alone.

27, the market is widely rumored that Italy will seek assistance.

Although the news was 28 days ago

The euro zone was swept away by Moodie.

28, Moodie said, "once a member of a eurozone member defaults or withdraws from the euro area, it will greatly increase the possibility of more member states leaving the euro area, and the loss will not only be confined to the countries leaving the euro zone".

Moodie, chief ratings officer of Europe, Middle East and Africa, and Alastair Wilson, global sovereign risk manager, said in the report that the split of the euro zone will have serious credit for the entire euro area and even the EU Member States and EFSF.

Moodie believes that the EU needs political impetus to implement effective crisis resolution plan, but this impetus can only be achieved after a series of turbulence, and turbulence may lead to the loss of financing capacity of the euro area member states.

In recent weeks, the possibility of more negative consequences of the European debt crisis has increased, mainly reflected in the political uncertainty in Greece and Italy and the deterioration of the euro area economic outlook.

Italy is embroiled in "rescue" storm

According to Dow Jones newswires, citing 28 euro zone and IMF officials, both sides said that the report on IMF's possible assistance to Italy is "not credible".

Italy newspaper "news" 27 quoted IMF sources reported that the organization may provide 400 billion to 600 billion euros in aid to Italy, to support the new Italy Prime Minister Monti in 12 to 18 months to implement reforms, restore market confidence.

According to the report, the specific provision of IMF includes a loan of 4% to 5% interest rate, which is significantly lower than the 10 year treasury bond yield between Italy and Italy, which is between 7% and 8%.

It is also reported that the government of Italy plans to announce the details of the latest fiscal tightening policy in December 5th.

Earlier this month, Italy's new government promised to implement a series of austerity and reform measures to stimulate economic growth and restore budget balance.

Analysts believe that in order to quell the market tension on the debt problem of the country, Monti needs to announce policy details as soon as possible.

According to Italy media, the government's measures in December 5th may include the adjustment of the housing tax, the sales tax, the VAT tax rate of the catering industry and the increase of the retirement age. It is expected that the tightening policy will be 15 billion euros.

Finance ministers will focus on three hotspots

According to Bloomberg reports, the euro zone is expected to finalize the details of the EFSF operation this week. Specific measures may include the possibility that EFSF will provide about 20% to 30% guarantees for the highly indebted member states in the euro area, which will be in the form of marketable partial insurance documents (tradable).

Partial protection

The form of certificates is issued by the special purpose tool (SPV).

This may extend the size of EFSF to 3 times the original 440 billion euros.

In the future, EFSF may also be given the power to buy member state bonds in the two tier market, set up credit investment funds, sell short-term debt and so on.

In addition, according to Reuters, Germany and France, the two core members of the euro zone, are leading the eurozone to reach a new fiscal policy agreement, which will strengthen the fiscal discipline of euro zone member states and give the European Commission more power to budget for Member States.

The agreement is expected to be announced early before the December 9th EU summit and formally implemented in early 2012.

The third hot spot of market concern is the prospect of euro bond.

Last week, the European Commission announced three proposals for the issuance of Euro bonds. However, the issuance of Euro bonds at this stage is still strongly opposed by Germany.

The European think-tank, the European Economic Cooperation Organization (ELEC) 28, suggests that the EMU Bond Fund can be established as a pitional plan for the issuance of Euro bonds.

ELEC recommends that the fund will be open to all Member States of the euro area, and that countries can gather their short-term loans through this fund in a specific way to reduce the financing pressure of highly indebted countries.

According to the German "Le Monde" 28 reported that the euro zone AAA rating countries seem to have abandoned the idea of rescuing the highly indebted countries in the short term, and began to plan the way of self preservation.

Germany and the euro zone 5 other countries with AAA ratings - France, Finland, Holland, Luxemburg and Austria - are considering joint issuance of bonds.

Joint bond funds are used not only for the 6 countries, but also for highly indebted member countries under strict conditions.

But this bond is not the "Euro Bond" issued jointly by the 17 countries of the euro area, but the "elite bond" or "AAA bond". The core purpose is to stabilize the AAA rating of the 6 countries.