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French, German Leaders Believe Greece's Future in Eurozone, EU Issues 5 Billion Euro Bond for Portugal

EU issues 5-bln-euro bond for Portugal

BRUSSELS, Sept. 14, 2011, (Xinhua) --

The European Commission issued Wednesday 5 billion euros (6.8 billion U.S. dollars) bond with maturity of 10 years for Portugal, under the context of the European Financial Stabilization Mechanism (EFSM).

According to the commission, the new bond is the second with a 10 years maturity placed by the EU under the EFSM so far. The 5 billion euros bond, which will mature on 21 Sept. 2021, bore a coupon rate of 2.75 percent, and was priced at mid-swaps 20 basis points.

The European Commission said that demand was "solid." Subscriptions amounted to 7 billion euros and the transaction was finished in three hours.

Substantial investor demand came from across Europe, in which 23 percent came from France, 22 percent from Germany/Austria, 17 percent from Britain, and 12 percent from Asia. The other European nations represented 24 percent.

Over 13 banks and investment banks took part in the transaction, including big ones like Barclays, HSBC, UBS, Citibank, Goldman Sachs and Credit Suisse.

In the coming weeks, through the EFSM, the EU plans to launch further bonds for 5 billion euro, in one or two transactions with maturities from 5 to 15 years.

For the remainder of 2011, the EU intends to issue one further bond. The combined upcoming funding in 2011 will be used for loans to Ireland and Portugal.

Editor: Mu Xuequan

French, German leaders believe Greece's future in eurozone

PARIS, Sept. 14, 2011 (Xinhua) --

French President Nicolas Sarkozy and German Chancellor Angela Merkel said they were convinced that "the future of Greece is in the eurozone," according to a statement issued by the Elysee Palace after a telephone conference among leaders of Greece, France and Germany.

Stressing the importance to conform with the eurozone agreement settled on July 21, Sarkozy and Merkel said they attached great importance to the Greek government's implementation of the "strict and effective" recovery program supported by other eurozone members and the International Monetary Fund (IMF).

As a pre-condition to install new bailout package for debt-ridden Greece, Germany-led eurozone bloc and the IMF has demanded Greek government to implement a series of austerity measures in order to convince the lenders on the solvency of the state.

"Greek Prime Minister confirmed the Government's absolute determination to take all necessary measures to implement all commitments," the statement added.

Sarkozy and Merkel are "convinced that the future of Greece is in the euro area," the statement stressed, saying the implementation of the commitments by Greece is not only essential for the state to have "a sustainable and balanced growth" but also able to "strengthen the stability of the euro area."

The fear over the contagion of a possible default by Greece has weighed down and unsettled European financial market for months. Last weekend, Greek government announced new set of austerity measures, including a two-year property tax, to cut deficit and make up revenue shortfalls after rounds of rescuing packages made little effect in restoring investors' confidence.

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