Euro periphery may suffer from pact weakening

The fallout from last week's decisions on the stability and growth pact could impact on the bond markets of countries with less fiscally prudent reputations than Germany and France. Rating agency Standard & Poor's said last week Italy's sovereign rating could be cut if fiscal imbalances were not addressed. The top-notch ratings of Germany and France are not seen under threat.

Source: Reuters

German and French budgetary slippage has strained the EU's Stability and Growth Pact, but the bond marke