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ForexTV NewsDesk | November 2 2011 11:31 EDT
ForexTV.com (New York) by Dylan Tulic
Citing market conditions, the European Financial Stability Facility has decided to postpone a planned €3 billion offering of 10-year bonds. According to reports, the offering is now planned to take place at some point over the next two weeks, following the results of the G20 meeting slated to take place in Cannes later this week.
The delay was primarily caused by market turmoil following the announcement by Greek Prime Minister George Papandreou that he intends to call a referendum on the latest bailout package for the debt-stricken nation.
The practical consequences of the delay will be minimal, as issuance was intended to refinance a loan to Ireland. According to Bloomberg, Ireland will redeem a €4.4 billion bond due on Nov. 11 using its own cash in response to the delay.
The symbolic consequences, however, can be much larger. The fact that the AAA-rated European bailout mechanism is unable to sell its own debt at acceptable levels is a huge embarrassment for the eurozone.
Papandreou is expected to meet with European leaders later on Wednesday to brief them on the referendum decision, which reportedly came as a surprise.
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