France And Germany Exclude Euro Bond &Nbsp; Want To Create A Big Economic Government In The Euro Area.

European banks are beginning to turn more to buy American bonds because they are worried about more European debt crisis.

On the 17 day, a European bank bought a US $500 million bond in one fell swoop.

Is fiscal consolidation better than euro bonds?

Merkel and Sarkozy decided to be

Next summer, the euro zone will introduce laws restricting deficits to ensure that all Member States can balance their accounts.

Lagarde, the new president of the IMF, hints that Europe is now plunged into the mire of budget cuts, which will only make things worse. Fiscal adjustment is bound to hurt the prospect of economic recovery and worsening employment.

As for European common bonds, Sarkozy said such a move could only be implemented after the completion of the financial integration.

Merkel said she felt that euro bonds were not a panacea, and the measures they proposed were the means to solve the current crisis step by step and win back the trust of the market.

The proposal to issue eurozone joint bonds has been strongly opposed in Germany.

France and Germany are worried that this will push up the cost of domestic financing and make the weaker countries in the euro area lack the power to reform their economies.

Stiglitz, the Nobel Laureate in Economics (Joseph Stiglitz), commented that if Germany is unwilling to accept Euro bonds or some form of fiscal union, it should consider withdrawing from the monetary union, at least in a destructive way to solve the European debt crisis.

Germany has been the main driving force for the recovery of the euro area economy, but the economic indicators released on the 16 day showed that the German economy almost stagnated, and the economic growth in the two quarter was only 0.1%, far below.

What surprised the market was that France and Germany also decided to levy financial pactions tax ahead of time.

In September next year, French and German finance ministers will submit a joint proposal to levy a financial paction tax in the European Union.

France and Germany also ignored the call for the expansion of the European financial stability fund (EFSF).

EFSF has only 44 million 500 thousand euro plates. Once Italy or Spain need to save, EFSF will not be able to deal with it.

To expand the rescue fund, France and Germany will inevitably bleed.

Some agencies have warned that this not only threatens the French credit rating, but also threatens the euro zone's sovereign debt rating AAA and Germany and Holland.

AAA Club outlook

For a long time, France, Germany, Britain and the United States have been regarded as the core members of the AAA club with the highest sovereign debt rating, known as the "four giants".

Although in August 5th, S & P downgraded the US sovereign credit rating to AA +, and the outlook was negative, 16 Fitch affirmed that the US sovereign credit rating was AAA, and the outlook was "stable".

Earlier, Moodie also reiterated his decision on the US rating.

For the differences between the three major rating agencies, a rating agency analyst told reporters that their differences are based on the difference between the criteria and the analysis indicators, there is no difference between right and wrong, and the market has its own view, which will serve as a reference only.

In fact, because of fears of a double dip recession in the global economy, the market's risk aversion has made the United States unscathed in the bond market.

A trader in the Merrill Lynch bond Department told reporters that buyers were "waiting in line" when the US issued the latest batch of treasury bonds last week.

Despite the S & P's expulsion of the us from the AAA club, the us ten year bond remains at a 2.13% historical low, yielding less than 15 other AAA countries and Belgium.

Instead, it remains.

The 17 minutes released by the Bank of England meeting also showed that the outlook for the UK was not good. The committee members who had been divided by raising interest rates were unanimously agreed to maintain a benchmark interest rate of 0.5%.

Analysts believe that Britain will start a new round of quantitative easing before Christmas this year.

Zhao Xuesong, an investment analyst with Aviva, a global investment and derivatives analyst, said that Norway and Sweden, which are generally recognized by investors for a long time to maintain AAA, have only a stable economic situation and a small debt burden. But the problem is that Norway and Sweden have a very small bond market, and liquidity is not very good. Investors take account of paction costs and are not very willing to frequent pactions.

Other AAA rated small country bond liquidity is also not very good.

As for Switzerland, although it has a healthy debt and deficit level, its GDP relies too much on the banking sector.

Financial and debt indicators are the main indicators used by rating agencies to analyze the rating of a treasury bond. The factors also include the country's long-term economic strength, institutional factors and susceptibility to risk events.

A sovereign debt analysis report by Moodie shows that in addition to the "four giants", the other AAA sovereign debt trust countries have more active financial prospects, and debts remain at a much lower level than those of the "four giants".

In the long run, many AAA countries face major challenges, including financial strain pressure caused by population ageing, structural factors affecting competitiveness, and flexibility in population and labour markets.