GREECE was left without a government for a fourth day running last night after squabbling politicians failed to announce a successor to fill the vacuum left by Prime Minister George Papandreou, who resigned yesterday. Without a new government Greece will run out of moneyin thenext three weeks if its international creditors stick to promises not to pay out its next 8bn installment of bailout cash.
German and French officials have discussed the formation of a more tightly integrated core Eurozone, while separate reports from Germany reveal that Angela Merkel’s party is investigating ways of some countries leaving the single currency while staying in the European Union. French Prime Minister Nicolas Sarkozy said yesterday that a ‘two speed’ Europe was a model for the future.
THE CLOCK is ticking for the ECB and international community to step in to save Italy, economists warned as the country’s borrowing costs shot through the roof yesterday. Yields on 10 year Italian bonds spiked through the 7% mark. Once yields on Portuguese and Irish debt reached such levels they became locked out of the markets and had to seek bailouts.
THE MSCI Asia Pacific index dropped 2.6%, heading for its lowest close in two months. Financials were the main drag for the regional index amid concerns about Italy’s finances and their effect on the global banking sector. Hong Kong’s Hang Seng index dropped 4.3% as HSBC holdings sank 7.5% after posting a 36% drop in quarterly profit.
WALL STREET’S S&P 500 recovered from an early loss but it plunged in lunchtime trading. It ended the day down 3.7%, its worst one day fall since August, with the financial sector down 5.4%. The FTSE Eurofirst 300 reversed early gains to shed 1.7% as the banking sub-index dropped 3.9%.
THE COST of solar cells and microchips has nowhere to go but down because of a supply glut for the commodity they are made from. Polysilicon has plunged 93% to $33 a kilogram, from $475 three years ago, as the top five producers more than doubled output. The industry next year is estimated to produce 28% more of the material than will be consumed, up from 20% this year.
CHINA’S soybean imports, the world’s biggest, fell for a third month in October as declining profits from processing the oilseed prompted traders to cut buying. Purchases were 3.81million metric tons, compared with 4.1 million in September. A decline in Chinese imports, which accounts for more than half of the globally traded volume, has contributed to a 16% fall in prices this year.