Greece heading for a default

So the focus was almost entirely on Greece and there are less people feeling that there will be a contagion as the greek situation is special due to the recklessness of the previous 9-10 governments. The apparently precarious position of its banks added to negative sentiment built up from the country’s funding problems and the disjointed response from eurozone leaders. At these yields deficit reduction is unworkable and it appears that external support will be necessary, though the government continues to insist otherwise. Trichet’s intervention and the confirmation that the ECB will be extending its relaxed collateral rules – essential for Greek banks – stemmed the widening tide and brought spreads back in during the afternoon. Greece’s spreads are now trading around 435bp and the Markit SovX WE is trading at 95bp, with most of the active constituents improving in tandem.

There is no possibility that Greece will default on its debts and no reason to doubt Germany's commitment to an EU pledge to help Greece, the European Union's monetary chief said on Thursday.
Economic and Monetary Affairs Commissioner Olli Rehn told a conference in Brussels that Greek default was not an issue, saying: "There will be no default."

Rehn said he believed Germany was fully committed to doing its part to help Greece, if Greece requests financial assistance, despite the threat of a challenge to the aid package via Germany's courts.

The 16 countries that share the euro single currency agreed the details last week of how they would help Greece if required, including providing bilateral loans in proportion to their economic weight in the euro zone.
Germany would be expected to provide around 8.4 billion euros, according to the package, which will total around 45 billion euros -- 30 billion from the eurozone and 15 billion from the International Monetary Fund.

"I have no reason to doubt the German commitment if needed and if aid were to be requested," Rehn said, despite the possibility of a legal challenge in Germany to German involvement in the bailout mechanism.
Rehn also reiterated his intention to give more teeth to repeatedly breached rules on budget discipline and increase economic surveillance across the bloc to avoid any repeat of the fiscal crisis suffered by Greece.

1 comment:

  1. Good evening Mr. PM Robert Fico,I'm Tibi from Romania,Craiova city,i.e. city of kings.
    I don't see Romania in this ranking.
    I forecast worse than Greece for Romania & Bulgaria.
    Please visit Romania for teaching PM Emil Boc how to join euro zone.