The European Central Bank has confirmed it is ending its huge net asset purchase program to stimulate the Eurozone economy this month. The ECB has stopped its bond-buying scheme, worth €30bn a month, despite a recent slowdown in the bloc's recovery.
Stocks in Europe reversed earlier gains by Thursday's close to finish lower, as investors digested fresh news out of the central banking sphere. The pan-European STOXX 600 closed down 0.15%, with the majority of sectors falling into negative territory. The U.K.'s FTSE 100 slipped 0.43% by the close, while France's CAC 40 ended a touch lower, off 0.08%, and Germany's DAX rose 0.19%.
German business sentiment dropped for a fifth straight month in September to its lowest since early 2010, raising fears of recession and underlining that a bold bond-buying plan laid out by the European Central Bank is no economic blessing.
Angela Merkel is seeking help from her estranged, former mentor Helmut Kohl, architect of the Euro, to restore voter faith in the European project before next year's election.
The value of bad debts held by Spain's banks in July rose to 169.3bn Euros, according to latest figures from the central bank. The Bank of Spain said 9.9% of banks' total loans were in arrears, up from 9.4% a month before.
Tens of thousands of Spaniards rallied in Madrid to protest against spending cuts and tax rises in a country reeling from high unemployment and a gruelling recession. Teachers, nurses and social services workers thronged the capital's central Plaza Colon a day after Spain said it would present new economic reforms at the end of September likely to contain more austerity measures.
Germany's Constitutional Court rejected on Tuesday an attempt to further delay a ruling on the European Stability Mechanism (ESM) and fiscal compact, which had previously been pushed back by months while the judges reviewed whether the German parliament is permitted under the constitution to ratify the treaties.
Chancellor Angela Merkel defended the European Central Bank on Friday after its plan to buy the debt of troubled Euro zone states stirred outrage in Germany and threats from some in her own party to try and block the scheme.
Managing Director Christine Lagarde of the International Monetary Fund (IMF) showed strong support of the European Central Bank's new framework for intervention in the Euro zone debt crisis, deeming Thursday’s action 'an important step toward strengthening stability and growth.'
Asian shares looked set for their biggest daily gain in nearly five weeks on Friday after the European Central Bank outlined its bond-buying scheme to help calm the Euro zone's debt crisis, while firm US data fed speculation of a strong jobs report later in the day.