Merkel delays German ratification of European fiscal pact

Merkel delays German ratification of European fiscal pactGerman chancellor, Angela Merkel has announced her decision to delay the ratification of European fiscal pact by the German government.

Merkel said that she is delaying the process until an Irish referendum on May 31 amid intense protests against European austerity drive. The German Chancellor was expecting to ratify the pact including EU treaty creating a eurozone bail-out fund on May 25. She hoped that the the ratification will send a signal to the Irish to vote Yes and Mr Hollande to agree with the terms already agreed by his country’s government.

Leaders in the European Union had collectively backed fiscal union pact and also agreed on the details of a €500 billion permanent bailout fund for the euro zone. The uncertainty remained as the government bond yields in Portugal continues to increase.

Analysts say that bondholders are realizing that they might have to write-off some of their dent to Portugal in the same as Greece. The euro-zone's move toward a closer fiscal union and progress in talks between Greek leadership and private lenders has sent a positive signal to the investors indicating a possible end to the crisis in the coming future.