http://www.smoothradio.co.uk/news-headlines/imf-denies-italian-bailout-package-talks/cb4e3
European Markets Rally On Bailout Optimism
"It had been reported by La Stampa over the weekend that the world's lender of last resort would release a fund worth up to 600bn euros - potentially side-stepping the eurozone's own rescue mechanisms because of the huge sums involved."
somebody is lying! if substantiated that the imf has discovered some new monies to recover Italy, from where did it appear? Largard says that they don't have the funds for this and denies these discussions ever took place. The market screams "liar" and rallies for huge gains expecting the rumors to be true. my friends, we couldn't pay for drama like this. this investment is better than the best of soap operas!
European Markets Rally On Bailout Optimism
The German deputy finance minister said the approval by the country's parliamentary budget committee of guidelines for the European Financial Stability Fund (EFSF) was a good sign for negotiations on the bailout fund at the upcoming summit.
EU leaders will discuss the bailout fund, as well as individual states' plan for quantitative easing, in Brussels on December 8.
Earlier, the International Monetary Fund poured cold water on market hopes that it was preparing a substantial financial aid package for debt-laden Italy.
Following media reports in Italy at the weekend, the IMF released a statement to deny suggestions talks had been held.
Nonetheless, the FTSE 100 closed nearly 2.8% higher, while the German Dax and French Cac40 gained 4.6% and 5.5% respectively.
Italy's MIB index was 4.6% by the end of the trading day.
It had been reported by La Stampa over the weekend that the world's lender of last resort would release a fund worth up to 600bn euros - potentially side-stepping the eurozone's own rescue mechanisms because of the huge sums involved.
Italy has been generally seen as 'too big to bail out' and the feasibility of such a deal may have been called into question by contributors to the IMF, including Britain.
"There are no discussions with the Italian authorities on a programme for IMF financing," a spokesman said.
A source has told Reuters that contact between Rome and the IMF had intensified but it was unclear what form of support would be available.
The IMF does not have 600 billion euros.
But stocks in Asia harallied strongly overnight on hopes of a deal emerging to help the euro's third biggest economy.
The IMF's statement dented the opening of trading in Europe - the FTSE 100 was 0.7% higher in the first few minutes of trading and only later in the session did it extend those gains.
The Italian MIB rose 1.9% on opening.
Gains in the morning were tempered by a warning from the credit ratings agency Moody's that all European governments are at risk of downgrades because of the escalation in the sovereign debt and banking crises.
There has been talk of a so-called 'elite' bonds - guaranteed by the eurozone's top six countries as plans to increase the size of the European Financial Stability Facility fund further, appear dead in the water.
Yields on Italian, French and Spanish bonds have been rising in recent weeks as contagion - the lack of confidence in the eurozone - spread to countries at the single currency's core.
The yield on an Italian 10-year bond remains above 7% - the figure which tipped Ireland, Greece and Portugal into seeking bailouts.
Associate editor of the Financial Times (FT) and president of eurozone think tank Eurointelligence Wolfgang Munchau believes the single currency has only days to avoid collapse.
Writing in the FT he said: "The eurozone has 10 days at most."
He argues for fiscal union, a eurozone bond and a "backstop" from the European Central Bank to resolve the immediate threat of bankruptcy.