More importantly the Spain is in the sights

The announcement of the Irish rescue was to stem the crisis, it only reinforces the confidence of markets towards the "periphery" of the euro area. Pressure increased on the single currency, which dropped by 1.44, to 1,3393 dollar at the end of European session, thus falling on the levels of two months ago. The euro has dropped 1.99 against the yen, and 0.81 against the British pound.

The German Chancellor, Angela Merkel, herself described the situation of the eurozone to "extremely serious". The Irish problem is indeed being spread to other "weak ties". The market increasingly believes that the Portugal will also have to appeal for external assistance. John Lipsky, the number two of the IMF, also indicated that the country could count on aid if needed. Investors know that, unlike the Ireland, the Portuguese State has needs significant funding in the first half of 2011: BNP Paribas, he must repay more than 5 billion in April and about 7 billion in June. Disappointing figures on the budget deficit came to add to fears yesterday. The risk premium jumped: the "CDS" ("credit default swap") of the Portugal rose by 30 points base, 485 points, according to Markit. This means that the cost to ensure Portuguese debt rises. Furthermore, the difference in performance of State bonds with those of the Germany reached now no less than 429 basis points (4.29). More importantly, the Spain is in the sights. The market begins to put pressure on the largest of the "devices", which can trigger a systemic crisis.

Safety net

Can all of these countries be supported by the European safety net According to the calculations of Barclays Capital and BNP Paribas, the answer is Yes: the needs of the Ireland, the Portugal and the Spain for the period 2011-2013 may be covered by joint assistance from the European Commission, European stability (EFSF) and the IMF Fund. BNP Paribas considers the needs of the three countries over three years to 428 billion and funds available to 473 billion euros. For Barclays, the amount of facilities is between 473 and 565 billion euros, according to the IMF, the contribution and the needs of the Ireland, the Portugal and the Spain reach 389 billion by 2013.

Yesterday, the Irish CDS was soaring 51 basis points, at 580 points. "The events in Ireland are very concern;" really, there is a risk that the Government suffered a setback on the budget, then it determines the support of the IMF and the European Union, says the team of RBS. The market knows that this aid does not resolve everything and is used primarily to give time to the Irish. "The political uncertainty is mounted a notch in Dublin while the Prime Minister is pushed to resign even in his own camp.

Markets now turning their eyes to the European Central Bank (ECB): will it be able to put an end to its system of supply of liquidity to banks in the euro area Its members for the time being continue to say so. The operation to this day 3 months is likely to attract a significant demand.