Short Term and Long Term Euro Interest Rates. Projected Future Euro Interest Rates.

09.02.2006

Date	Euribor Rate
Sep '06	3.335 %
Nov '06	3.580 %
Dec '06	3.645 %
Mar '07	3.725 %
Dec '07	3.675 %
Dec '08	3.675 %

All of the above data and graphs are accurate to the best of our knowledge.

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Policy Comments

Events which may facilitate the increase/decrease of the interest rates in the future:
1. Economy slowdown or growth increase in the Main Euro-Zone Countries: Germany, France and Italy)
2. Energy Prices Trends (higher oil prices will tend to slowdown European economy and will increase the threat of inflation)
3. Housing Price Trends (higher housing prices will make the ECB to act more decisively on rate increases)
4. Major Catastrophic or Terrorist Event (in case of such an event, the ECB is likely to ease and to reduce the interest rates)
6. German, French and Italian Budget Deficits (higher deficits will bring up the interest rates, since the Governments will be competing with the households for money)
8. Euro Price Trend (Higher Euro means more money flowing in- meaning lower interest rates)