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Euro remains near its low for 2011 | Euro remains near its low for 2011 |
(about 9 hours later) | |
The euro is near its low for the year following a tumultuous 12 months in which its existence has been questioned. | The euro is near its low for the year following a tumultuous 12 months in which its existence has been questioned. |
But Germany's Finance Minister Wolfgang Schaeuble said he was confident that the currency union would survive. | But Germany's Finance Minister Wolfgang Schaeuble said he was confident that the currency union would survive. |
"I think we will be far enough along in the next 12 months that we will have banished the dangers of contagion and stabilised the eurozone." | "I think we will be far enough along in the next 12 months that we will have banished the dangers of contagion and stabilised the eurozone." |
The euro was at $1.2960, a day after reaching a 15-month low of $1.2858. | |
The European single currency also fell below 100 yen for the first time in ten years. | The European single currency also fell below 100 yen for the first time in ten years. |
Germany, the eurozone's largest economy, has been instrumental in organising bailouts of its neighbours, without which the monetary union might have fallen apart already. | Germany, the eurozone's largest economy, has been instrumental in organising bailouts of its neighbours, without which the monetary union might have fallen apart already. |
Asked whether he could rule out the 17-nation eurozone breaking up, Mr Schaeuble said: "According to everything that I know at the moment, yes." | Asked whether he could rule out the 17-nation eurozone breaking up, Mr Schaeuble said: "According to everything that I know at the moment, yes." |
"Of course, the European Union cannot force anyone to stay in if they don't want to belong any more," he added. "But no such development can seen at the moment." | "Of course, the European Union cannot force anyone to stay in if they don't want to belong any more," he added. "But no such development can seen at the moment." |
The euro has dropped 3.4% against the US dollar this year, and 2.2% versus the British pound. | The euro has dropped 3.4% against the US dollar this year, and 2.2% versus the British pound. |
Debt yields | Debt yields |
In recent months, the yields on Italian and Spanish debt has risen as investors have worried about their ability to pay back their debts. | In recent months, the yields on Italian and Spanish debt has risen as investors have worried about their ability to pay back their debts. |
On Thursday, the Italian government sold 10-year bonds at interest rates as high as 6.98% - just a touch below a level considered unsustainable in the long run. | On Thursday, the Italian government sold 10-year bonds at interest rates as high as 6.98% - just a touch below a level considered unsustainable in the long run. |
Italy has 161bn euros in debt repayments due between February and April 2012, all of which it will have to finance through new borrowing. | Italy has 161bn euros in debt repayments due between February and April 2012, all of which it will have to finance through new borrowing. |
On Friday, the final trading day of 2011, Italian 10-year debt was trading on the secondary market at 7% - up from 4.8% at the end of 2010. | |
By contrast, on Friday Germany's 10-year debt yielded 1.83% and the UK's borrowing cost was about 1.98%. | |
Bailouts | Bailouts |
Last year, the eurozone and the International Monetary Fund bailed out Greece and the Irish Republic, which were struggling to borrow in the financial markets and pay their debts. | Last year, the eurozone and the International Monetary Fund bailed out Greece and the Irish Republic, which were struggling to borrow in the financial markets and pay their debts. |
This year, it agreed to bail out Portugal - and Greece for a second time. | This year, it agreed to bail out Portugal - and Greece for a second time. |
In September, UK Foreign Secretary William Hague called the euro a "burning building with no exits". | In September, UK Foreign Secretary William Hague called the euro a "burning building with no exits". |
But in November, eurozone leaders agreed a rescue plan that included boosting the size of its bailout fund, the European Financial Stability Fund, to capacity of 1tn euros. | But in November, eurozone leaders agreed a rescue plan that included boosting the size of its bailout fund, the European Financial Stability Fund, to capacity of 1tn euros. |
In December, 26 out of 27 EU member states backed a tax and budget pact to tackle the eurozone debt crisis. Only the UK said it would not join. | In December, 26 out of 27 EU member states backed a tax and budget pact to tackle the eurozone debt crisis. Only the UK said it would not join. |