Market Overview

Political Problems Flare Up In The Eurozone

Political Problems Flare Up In The Eurozone

The euro retreated slightly from Thursday's highs as political problems in the 17-nation bloc reminded markets of the region's fragility. The common currency traded at $1.3749 at 5:15 GMT on Friday morning.

The Wall Street Journal reported that Catalonia, Spain's leading industrial region, has set a date for a succession vote.

See also: #PreMarket Primer for December 13: Budget Wars Nearing An End

The region's leader Artur Mas announced on Thursday that a referendum on declaring independence from Spain would be added to Catalans' ballots in November 2014. Mas said the question will have two parts, the first asking if voters want Catalonia to be recognized as a state and the second asking if the region should be recognized as an independent state.

However, Spanish Prime Minister Mariano Rajoy said that such a vote would be considered unconstitutional and that there was no situation in which the vote would be allowed to take place. Although Rajoy was firm in his stance, he did not provide details as to how he plans to block the Catalan bid.

Meanwhile, in Germany, the country's political future rests in the hands of nearly half a million Social Democrats whose mail-in vote to confirm or reject the party's coalition with Angela Merkel ended on Thursday at midnight. The results of the vote are not due until Saturday, but Merkel is surely holding her breath as a rejection would almost certainly mean that Germany would need to hold new elections.

Most analysts expect that the results will show that the majority of Social Democrats voted yes and that Merkel will be sworn into office for her third term on Tuesday.


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