Sunday, August 22, 2010

Greece Redo to put pressure on Euro in September

Spreads on 10-year Greek debt have risen to 835 basis points over German debt and they are trading once again at the crisis levels of early May, before the EU launched its "shock and awe" rescue and the ECB began purchasing Greek bonds. IMF documents show that Greece's public debt will rise to 150% of GDP after three years, even if the government complies fully with the austerity measures. So with news that Spain is planning to softer its austerity package the fear is that other countries, including Greece, will follow suit. When everybody is back from summer holidays in September the Euro is sure to come under pressure again.

Read an excellent article here by Ambrose Evans-Pritchard

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