The E.U. Leaders Summit ended today after two days without a final resolution on a bailout plan for the debt ridden countries. The resignation of Portugal’s Prime Minister prior to the meeting prompted EU members to delay increasing the rescue fund, as the Portuguese Parliament rejected austerity measures. The leaders decided to wait until June to produce the anti-crisis plan.
Meanwhile, Greece’s terms were improved for their 110 billion euro loan package, which included an extension of the maturity from 3 to 7.5y ears and a reduction in interest rate from an average of 5.2% to 4.2%.
Eurozone leaders were able to conclude a deal how the European Stability Mechanism (ESM) will be funded and how the new permanent safety net that will become operational from mid-2013. A final decision was also reached on the “Euro Plus Pact” which is a list of areas for expanded economic policy harmonization.
Since opening the European session this morning at 1.4183, the Euro slid over 130 pips all the way down to 1.4057 half way into the US session.