EU officials in meeting to discuss euro zone contagion fears

| July 11, 2011
”EU

European stocks were lower today after it emerged that top EU officials are meeting in Brussels to discuss the ongoing debt crisis in the euro zone.

Germany’s DAX 30 lost 0.68% to 7,352.73, while France’s CAC 40 was down 0.89% to 3,878.60. London’s FTSE was 0.2% lower at 5,977.31.

The meeting has been arranged as fears for Italy increase. There are concerns that Italy, which is the euro zone’s third largest economy, could be dragged into the debt crisis, as it has the second highest sovereign debt ratio in the region.

Furthermore, the yield on Italian bonds reached 5.28%, which is close to levels that could put pressure on Italy’s public finances, according to analysts.

On Friday, shares in Italy’s biggest bank, Unicredit Spa, dived 7.9%, while the main Italian share index was down 3.5% on concerns over the country’s financial situation.

Meanwhile, the meeting will also discuss the second bailout package for Greece.

To date, Ireland, Portugal and Greece have been forced to seek financial aid and there have also been fears for Spain, as borrowing costs have risen.

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