Italy and Spain have faced increasing pressure from the bond markets, as well as outspoken calls to put their house in order.
To shift you into the right mood, Place du Luxembourg offers a detailed view of last week's bond yields and developments in the eurozone, with an abundance of references.
Not only vacations of political leaders and central bankers, but weekends too, were cut because of the credit downgrade of the United States and sour bond markets in the euro area.
Sarkozy and Merkel
The French president Nicolas Sarkozy and the German chancellor Angela Merkel issued a joint statement, where they reiterated their full support for the implementation of the agreement at the eurozone summit 21 July 2011.
They wish for the rapid approval of the decisions by the national parliaments, and they welcome the decisions by Italy and Spain to speed up budgetary consolidation and reforms for improving competitiveness. See (in French):
Zone euro – Communiqué franco-allemand
After a telephone conference of the Governing Council, the president of the European Central Bank (ECB) Jean-Claude Trichet issued a statement, which welcomed the announcements made by the governments of Italy and Spain concerning new measures and reforms in the areas of fiscal and structural policies. The Governing Council considers a decisive and swift implementation by both governments as essential in order to substantially enhance the competitiveness and flexibility of their economies, and to rapidly reduce public deficits.
The statement required full implementation by Italy and Spain of the new measures, as well as by all the eurozone countries with regard to both their national commitments and the decisions by the euro area summit 21 July.
On these conditions, the ECB dangled the hope of intervening through its Securities Markets Programme:
7 August 2011 - Statement by the President of the ECB
During the week, Italy was hit by prohibitively high rates to (re)fianance its public debt. At a press conference 5 August 2011, prime minister Silvio Berlusconi and finance minister Giulio Tremonti announced measures to accelerate the reduction of the public deficit and to introduce structural reforms.
Il Sole 24ore explains that anticipated budget cuts will balance the Italian budget already in 2013, instead of 2014: Anticipo 23 miliardi per i tagli. More on the government proposals, including a balanced budget amendment to the Constitution, here, and on the demands of the ECB here.
In the other big eurozone country hit by the bond markets, El País offers us an overview of the new measures by the Spanish government and finance minister Elena Salgado during the weekend: Salgado detalla un plan de ajuste de 5.000 millones ante la présion europea.
The Financial Times has gained access to and published the statement by the finance ministers and central bank governors of the G7 countries, who promise action and liquidity.
This morning the markets in Asia have not been jubilant, but perhaps we should wait for the details of various measures to emerge and be digested.