All The Latest News On Greece


Photo: Klearchos Kapoutsis on flickr

The eurozone debt crisis is escalating across the pond with no clear solution in sight.  New rumours abound from important EU officials that a Greek default could be imminent.Here’s where we stand:

– German Finance Minister Wolfgang Schaueble just said that EU leaders may need to revise the Greek bailout, according to Dow Jones.

– The ECB’s Klaus Knot was quoted as saying that there is a chance that Greece will default, according to Reuters. While he emphasised that this was one of many possibilities available at the moment, this is a big admission for an organisation that has emphasised their commitment to preventing a disorderly default at all costs.

– Greek Finance Minister Evangelos Venizelos reportedly told members of his socialist party that he sees three scenarios for Greece: bailout and a 20% haircut for bondholders, no bailout and 50% haircut with an orderly default, or just a plain old disorderly default. The Greek government subsequently denied the veracity of this report.

– G20 leaders made a stab at market stability last night, when they released a communique saying that they would support the eurozone and prevent global financial meltdown. However, they aren’t going to talk about tangible actions to do this until October.

– Action to immediately recapitalize European banks has been slow in coming, even after finance ministers publicly admitted that this was necessary at the EcoFin meeting last weekend. European Comission spokesman Olivier Bailly told reporters today that there’s currently no plan to do this.

Little of this news bodes well for markets. French and German CDS have hit their highest levels in recent memory. Yields on Greek 2-year bonds passed 68%, a turnaround from a decline last week.

Just a reminder on how close we are to a Greek default.

– Consensus remains that Greece can make it to October without a default.

– At the EcoFin conference last week, EU leaders said that they’d like the EFSF expansion to be approved by early October and implemented by the middle of next month.

– Finnish Fin Min Jutta Urpilainen expects the Finnish parliament to approve the EFSF expansion in a vote next week, according to Reuters, after finance ministers agreed that collateral should be universal. However, she admitted that the details of the agreement have not been ironed out. By the way, Malta wants everyone to know it wants in on the collateral deal.

– The IMF/ECB/EU troika will not decide on whether Greece will receive its next tranche of $11 billion in aid until early next month.

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