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The FT has the story that fears that a new banking crisis is emerging from the failures of the Eurozone are hitting markets in Europe. The story continues:
The jitters are back. With policymakers and private-sector creditors of the Greek government dragging their feet over the terms of how Greece’s sovereign debt burden should be restructured, the contagion effect has firmly taken hold of the banking market again and investors have driven down shares and bonds across Europe.
After a period of relative calm for many banks, it seems a collection of triggers – political and economic hiccups in Italy and Friday’s looming publication of potentially disturbing European bank stress test results, as well as the growing frustration at the Greek impasse – have combined to spook the holders of bank paper.
Though Italian banks on Tuesday reversed some of the dramatic share price slump of previous days, the shares of French, German, Spanish and even non-eurozone lenders in the UK, have been suffering. Spain’s Santander pulled an asset-backed bond issue. Also in Spain, it emerged that the debt crisis was threatening to derail the planned flotations of Bankia and Banca Cívica, two unlisted savings banks.
There are two reasons for the spreading fear. First, there is the rather hazy issue of macroeconomic sentiment. Political tensions between Italian premium Silvio Berlusconi and his finance minister Giulio Tremonti, in part over economic policy, helped put the underlying Italian fiscal position under the microscope. With the financial health of Spain, Portugal and Ireland still in question – and by some measures Belgium and France, too – banks in those regions, as key economic proxies, and as big sovereign debt holders, are obvious targets for market bears. It is the nagging question mark hanging over Ireland, the UK’s biggest trading partner, that poses the biggest eurozone threat to British banks.
Other Freedom News
The Telegraph reports that Johann Hari has been suspended from The Independent. The story continues, "Mr Hari, a multiple award winning political journalist who writes for the Independent, was exposed after a reader noticed that a quote in one of his stories had been cut and pasted from a book.
He denied plagiarism but since then users of the internet have found further examples of him allegedly recycling quotes."
The Telegraph reports that the coalition government will support Labour's BSkyB motion. The story continues, "The motion tabled by Labour leader Ed Miliband states that ''this House believes that it is in the public interest for Rupert Murdoch and News Corporation to withdraw their bid for BSkyB''.
News Corp's bid to buy the 61% of shares in the satellite broadcaster which it does not already own was yesterday referred to the Competition Commission by Culture Secretary Jeremy Hunt."
The Guardian reports that Libyan rebels have gained ground in the West of the country. The story continues, "A flattened lamp-post, two neat rows of bullets and a no-left-turn sign lying on the tarmac road mark the frontline in Libya's western mountains.
Nearby are seven young men, leaning against a battle-scarred building they say was once a guardhouse for Italian soldiers during the second world war. Another sits on a rock, gazing into the desert of no man's land in search of Muammar Gaddafi's forces, said to be little more than a mile away."
Freedom In The House
Today marks the final PMQs till Autumn.