After extensive negotiations which ran into the early hours of this morning, European Union finance officials reached an accord on the issue of how floundering banks should be managed.
It is hoped that this step will support confidence among investors in the stability of the currency bloc.
The role of the European Stability Mechanism was also agreed upon.
Following the meeting French Finance Minister Pierre Moscovici stated that defining a role for the ESM had been a paramount issue for France as: ‘It would not have been coherent on the one hand to put in place a direct mechanism for recapitalization by the ESM and on the other to exclude the ESM from the game of flexibility.’
Meanwhile, German Finance Minister Wolfgang Schaeuble informed reporters that: ‘It took a long time and it was arduous and intense’ but it was a key step in establishing ‘that shareholders and creditors are liable first and foremost.’
With an agreement between the EU nations finally reached talks with the European Parliament can begin and a final bill can be drawn up.
In other news, the latest data has shown that the German Import Price Index declined by more than expected in May, sliding 0.4 per cent month-on-month and 2.9 per cent year-on-year.
Despite this, the Euro strengthened modestly against the Pound as the European session began and was trading higher against a broadly softer US Dollar.
However, with German unemployment change figures showing a loss of 12,000 positions (economists had forecast a gain of 8,000) and the nation’s unemployment rate holding at May’s revised figure of 6.8 per cent, additional common currency fluctuations may occur.
Euro (EUR) Exchange Rates
As of 09:10
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3024 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8501 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3995 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6646 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3598 <