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London - European shares hit their six-week
closing low for the second day in a row on Friday after cautious comments by
German chancellor cooled market hopes that Germany would back monetary measures
to tackle a debt crisis in the euro zone.
Responding to a call for “decisive action” from the British Prime
Minister, David Cameron, Chancellor Angela Merkel stressed that European
institutions “cannot pretend to have powers don’t have”.
The European Central Bank is not allowed to buy sovereign bonds on
the primary market but a growing number of market participants have called for
the central bank to intervene as a lender of last resorts for struggling euro
zone countries.
“The [market’s] scepticism comes from the realisation that there is
no magic bullet in place to solve this crisis,” said Giancarlo Perasso, chief
economist at Redux-Matrix, which has $100m under management.
The FTSEurofirst 300 index of top European shares provisionally
closed 0.5% lower at 952.99 points. The pan-European gauge was down 3.2
percent for the week.
