TIMES ONLINE: The President of the European Commission lashed out at speculators and threatened more regulation yesterday after the euro plunged to its lowest level for 14 months and stock markets suffered another battering.
Investors dumped stocks and bonds in a mass flight from risk as demonstrators in Athens clashed with police. Three people died after buildings were set alight in protests against cuts to pay and pensions in Greece.
A threat by Moody’s rating agency that it might downgrade Portugal fuelled the market mayhem. In London, leading shares joined the rout and the FTSE 100 index shed 70 points, its second day of decline. Madrid suffered worse pain, with the Ibex index of leading shares down 2.25 per cent as money fled to havens, such as the dollar and US Treasury bills.
José Manuel Barroso, the Commission President, said that it would act swiftly with further market regulation and accused credit rating agencies of pandering to the market mood. “The Commission will do whatever is necessary to ensure that financial markets are not a playground for speculation,” he said.
Michel Barnier, the Internal Market Commissioner, has already threatened regulation of rating agencies, and Mr Barroso joined the attack. He called the agencies’ working methods deficient and said that they were “too cyclical, too reliant on the general market mood rather than on fundamentals — regardless of whether market mood is too optimistic or too pessimistic”.
Investors raced to the exit, ignoring pleas from politicians to support the €110 billion rescue package for Greece. Instead they scoured the market for indications that Greece’s insolvency virus might spread to other Mediterranean eurozone states burdened with high debt, excessive spending and low growth. >>> Carl Mortished, Ian King | Thursday, May 06, 2010
