Markets calmed by political stability

THE prospect of technocrat-led governments in both Greece and Italy calmed markets but volatility is expected to return next week as both regimes attempt to push through austerity measures.

There was a flurry of phone calls between the leaders of the large eurozone countries yesterday and Germany’s Chancellor Angela Merkel also spoke to US President Barack Obama. The US fears the euro crisis is threatening growth in the rest of the world.

Nerves were further frayed when institutions began to ditch French bonds following what Standard & Poor’s said was a mistaken downgrade on their website. This followed an admission by the head of the EU’s rescue fund that they could find it difficult to leverage it up to at least €1 trillion.