Market information

Monday, January 30, 2012

President Sarkozy has announced several tax increases to face the current economic crisis. In October this year, the VAT in France will increase from 19.6 to 21.2 percent and 0.1 percent tax will be levied on financial transactions. According to Sarkozy, France's deficit for 2011 will be lower at 5.3 to 5.4 percent. Previously, a deficit of 5.7 percent was expected.

The Greek Prime Minister Lucas Papademos and his main coalition partners have agreed on the new budget cuts. The new budget cuts form a condition for the payment of financial support from the European Union (EU) and the International Monetary Fund (IMF). Last week, voices have emerged within the EU that Greece should transfer her financial power to a newly appointed EU official. Among others the Greek finance minister, Evangelos Venizelos, rejected this idea.

The U.S. Treasury Secretary, Timothy Geithner, has asked Europe to expand the European emergency fund. According to Geithner, the euro crisis and oil prices are important factors that affect recovery of the U.S. economy. According to bankers of the economic summit in Davos, Switzerland, the United States wants Europe to double the European emergency fund to EUR 1.5 trillion.

The 6M Euribor remained unchanged at 1,14%. The 10Y Swap decreased by 3 basis points to 2,33%.

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