German Chancellor Angela Merkel told reporters she was “very optimistic” about the resolution of Finland’s collateral demands after she and Finnish PM Jykri Katainen met in Berlin today, according to Bloomberg.News that the BRICs (Brazil, Russia, India, and China) will increase their holdings of European sovereign bonds could bring fire to shaky U.S. markets this morning.
Collateral has been viewed as one of the major hurdles in the passage of the Greek bailout proposed on July 21. Finland successfully negotiated a bilateral collateral deal with Greece last month, but other countries threw a wrench in that plan when they clamored for the same treatment.
Merkel’s statements — although they signal no tangible change in the status of the deal — may be driving European markets late this morning. The DAX is now up 1.64%, the CAC is up 0.62%, and even Italy’s FTSE MIB is up 1.87%.
The BRICs’ consideration of bond purchases could drive that momentum even further.
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