European stocks lower as ECB member denies Greek debt forgiveness
City Index October 29, 2012 4:15 PM
<p>European stocks have retreated as Ewald Nowotny states the ECB will not offer Greece debt forgiveness.</p>
The major eurozone stock indices have commenced the week's trading lower today (October 29th), as one European Central Bank (ECB) governing council member claims the institution is banned from participating in Greece's massive debt restructuring programme.
Ewald Nowotny said such involvement would be tantamount to printing money to finance governments and for the ECB forgiving debt is not an option, Bloomberg reports.
The ECB holds some €45 billion (£36.1 billion) in Greek government bonds purchased as part of the now defunct Securities Markets Programme.
Speaking to the press in the Austrian capital city of Vienna today, Mr Nowotny stated: "For the ECB, forgiving debt isn't possible because it would be equivalent to indirect state financing."
He concluded that the ECB "certainly can't" take part in actions such as these in relation to the public sector.
At 11:35 GMT, all the major European indices were down, with the Dax shedding 0.7 per cent to 7179.8 points, the Cac 40 sliding by one per cent to 3401.1 points and the Madrid Ibex losing 0.8 per cent to 7708.3 points.
Find the latest spread betting strategies for the Frankfurt Dax at City Index.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.