Cypriot Bailout Hangs Over the Euro
The euro traded steadily at $1.30 as eurozone finance ministers met in Brussles to discuss Cyprus' bailout terms. The tiny island nation's debt has created a great deal of doubt for the region, but the terms of its deal are expected to be nearly completed and announced following the summit.
The bailout amount is uncertain, although there have been estimates of up to 17 billion euros. A total that high would match the nation's annual economic output and has many speculating that it cannot sustain that amount of debt.
Ahead of the meeting German Chancellor Angela Merkel said it would be important for the ministers to take their time and find a quality solution. However in contrast, Jean-Claude Juncker, Luxembourg's Prime Minister, told reporters that the issue needs to be resolved at Friday's meeting.
Investors will also have their eyes Italy, where February's gridlocked election caused many to belive that the country will not keep up its deficit reduction efforts. The candidates were unable to agree on a coalition following the inconclusive election and added fuel to the idea that the country's lack of leadership could derail the eurozone's recovery efforts.
According to Reuters, the country's parliament will meet on Friday for the first time since the election, where leaders will attempt to find a solution to the current political stalemate.
Although Italian bonds have been able to withstand the political uncertainty so far, many speculate that they will take a hit in the coming days as the country tries to put together a capable government.
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