.Should we expect a dose of European volatility today or this week? The German press is hot on the story of the Greek budget deficit, which is reportedly -- surprise -- wider than expected. According to the Spiegel Online and Suddeutsche Zeitung, the accumulated deficit is roughly 30 billion euros.
On a related note, the inspection team from the troika (the European Commission, the European Central Bank, and the IMF) announced on Friday that they were taking a one-week break from talks with Greek leaders. The troika may require Greece to resolve a deficit through increased taxation, budget cuts, asset sales, or -- at worst -- a default before releasing the next tranche of bailout funds.
In an interview published on a French news website over the weekend, French Prime Minister Francois Hollande said Europe should give Greece more time to meet its commitments. Meanwhile, The Wall Street Journal reports that aides to German Chancellor Angela Markel are looking to shore up the Greek shortfall without going to German lawmakers (i.e., German taxpayers).
European policymakers speaking with one voice, as always! At least European investors are sending a clear message, as they pushed gold to a record high in terms of the euro.
None of this appears to be affecting the two banks in the Dow (^DJI 0.41%) this morning, with JPMorgan Chase (JPM 0.38%) and Bank of America (BAC +1.04%) handily outperforming the index. This comes despite new revelations that Royal Bank of Scotland managers and traders participated in the manipulation of LIBOR -- a scandal that has already cost Barclays its CEO. Canada's Competition Bureau has named JPMorgan and Citigroup as participants in the LIBOR-rigging scheme.
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