Most senior European Equity markets gave up around 2.5% yesterday, as investors decided not to wait to see how the Greek situation pans out, amidst growing speculation they might leave the Eurozone.

EU leaders met at a summit in Bruxelles yesterday, to discuss ways of dealing with Eurozone debt, greater economic cooperation, and funding through proposed Eurobonds, opposed by Germany but with the new French President Francois Hollande, an enthusiastic supporter. This emphasises that the cooperation that existed between France and Germany is no longer anywhere near as close as when Sarkozy was in power.

At the moment, each country funds itself through issuing bonds and basically if your credit rating is low or there is increased risk in the area, your cost of borrowing goes up. This can lead to contagion as has happened regularly over the last two years, when investors seeing the economic chaos in Greece, stay away from Spanish or Portuguese bonds also. They then have to attract investors by raising rates.

The idea of Eurobonds that fund all members, has come up before but Angela Merkel, the German Chancellor, believes that Germany will end up picking up the bill  for increased lending costs acoss the Eurozone and is totally against the idea.

The summit was the 18th in the current series over two years, finishing in the early hours after an informal dinner. Not much was expected from it and on that front they delivered, though the ideas and opinions put forward will provide the agenda for a much more structured summit at the end of June, where expectations will be higher.