EU Ministers’ Meeting Ends Without Result, Euro Slumps

The finance ministers of the European Union countries discussed the European debt problems, particularly the situation in Greece on the weekend, but the meeting ended without any noticeable result. The euro reacted very negatively to the indecisiveness of the European politicians. Greece should convince the EU leaders and the International Monetary Fund that the nation is eligible for the next round of the bailout. So far, it seems, Greece had little success. Sweden’s Finance Minister Anders Borg stated Greece hasn’t done enough to meet its budget targets. Germany’s Finance Minister Wolfgang Schaeuble, together with Bundesbank President Jens Weidmann, rejected the proposition to use the European Central Bank to boost the EU bailout fund. Schaeuble said:

We don’t think that real economic and social problems can be solved by means of monetary policy. That has never been the European model and it won’t be.

Standard & Poor’s lowered Italy’s credit rating from A+ to A. The agency said in the statement:

Italy’s economic growth prospects are weakening and we expect that Italy’s fragile governing coalition and policy differences within parliament will continue to limit the government’s ability to respond decisively to domestic and external macroeconomic challenges.

EUR/USD dropped from 1.3686 to 1.3608 as of 5:01 GMT today. EUR/JPY fell from 104.82 to 104.12.