The European Contagion - spreads as expected.
The Portuguese bailout could rise as high as $129 billion according to latest reports. Prime Minister Jose Socrates announced yesterday that Portugal would request EU funding but it appears that many details of the package have already been worked out. - My take - Ultimately it is going to be more than the figure of $ 129 billion mentioned. All the cockroaches are not detected yet!
Spain's economy minister Elena Salgado has ruled out a Spanish bailout. The country passed its first 'contagion test' after it raised €4.1bn in bond sales Thursday. - My take - "One swallow does not a summer make" - Contagion test or not, Spain is headed to a bailout.
posted by Vikram R Chari @ 8:44 AM
36 Comments
36 Comments:
The contagion has spread and is leading to defaults - not un-imaginable. Read below:
Ex-PM says Greece should restructure debt: report http://dlvr.it/NkYj5
Europe debt crisis: Talk grows of allowing Greece, Ireland and Portugal to default on their bailout http://bit.ly/hjjImN
Portugal aid talks enter key phase under Finnish cloud http://dlvr.it/Nt141
Greek 10-year yields have surged to 13.936%, though Finance Minister George Papaconstantinou has denied rumors of debt restructuring. It was reported that Greece requested an extension to repay its debt but was denied by the European Commission and the European Central Bank.
Moody's has downgraded Irish government-backed banks to junk status. The ratings agency said the decision follows last week’s downgrade of Ireland’s sovereign rating to a level just one notch above official junk status.
A short note about Spain - Today's Spanish debt auction of short-term securities produced higher yields than expected, and has put pressure on the Spanish sovereign. The bank sold €3.5 billion of 1-year treasury bills at an average yield of 2.77% and 18-month treasury bills worth €1.1 billion, at an average yield of 3.36%.
Greece pays price of debt worries http://bbc.in/dNKpHf
Talk of restructuring Greece’s debt is unlikely to solve the country’s economic woes http://econ.st/ebMYWR
Greek deficit worse than thought http://bbc.in/dK1hU4
Economic data for Spain was out today (April 29th), unemployment reached 21.3% and retail sales decreased for the ninth straight month, falling by 8.6% year-over-year.
Portugal reaches bailout deal: http://tgam.ca/CTEA
Portugal bail-out: Portugal is to get a €78bn ($116bn) bail-out from the European Union and the International... http://on.ft.com/jbhelX VIDEO:
Portugal bailout in spotlight http://bbc.in/kcFa6o
Portugal 'to sink into recession' http://bbc.in/kRgGiA
Reuters FLASH News - Greece raises possibility of leaving euro zone and reintroducing own currency -report
Interactive Map: Debt Rising in Europe http://ow.ly/1sQJYi
http://tinyurl.com/3pob8b8 - Debt Rising in Europe - Interactive NY Times Map.
Greece's credit rating cut by S&P; euro gains pared http://ow.ly/1sSr87 Ratings agencies hammer Greece in EU chaos http://t.co/7tLqvNf
IMF in eurozone contagion warning http://bbc.in/ifdeVL I.M.F. Warns Europe’s Debt Crisis Could Still Spread http://nyti.ms/m2Iyjn
Europe's debt crisis is a year old and no closer to being solved http://econ.st/mau28m
IMF approves €26-billion loan for Portugal: http://tgam.ca/C1TT
Euro contagion fears hit Spain and Italy: Worries over contagion spread to Europe’s equity markets, with stock markets falling http://on.ft.com/lfKwFC
Greece's 100 billion-euro shadow over banks http://reut.rs/mem4Rm
Greece to present new austerity plan after Moody's cut its credit rating deep into junk territory http://t.co/ZyYCYZK
New Greece aid package 'agreed' http://bbc.in/k26nuQ
EU, IMF Say Greece Likely to Get Next Tranche of Aid by Early July
Greek debt downgraded by S&P http://ow.ly/1tKozB
June 19, 2011 - Europe fails to agree on Greek aid payout http://bloom.bg/mTaU2R
Euro zone warns Greeks on sovereignty and privatization - http://reut.rs/k0z0TV
(Reuters) - Euro zone finance ministers have approved a 12 billion euro ($17.4 billion) installment of Greece's bailout, but signaled that the nation must expect significant losses of sovereignty and jobs.
This is what will happen if countries go on an unbridled incautious path of "growth to nowhere".
This is a warning to other potential Eurozone countries - Portugal, Ireland, Spain......
Greece needs Herculean reforms to secure bailout: http://tgam.ca/Cd2b
S&P warning adds default threat to Greece's bailout http://reut.rs/k2Itgb
From the Economist -
A chart showing the yields on 10-year Greek debt over the past three months. The pattern?
There's a spike, followed by a decline, followed by a higher spike, followed by a decline to a higher trough, and so on. European leaders keep taking steps to avert disaster, and each time markets are less assuaged.
The latest spike corresponds to the stalemate over the IMF's willingness to continue making bail-out payments without a new, long-term rescue package in place (and the corresponding disagreement over how to rollover Greek debt, plus the drama surrounding the passage of Greece's new austerity plan). The IMF agreed to keep paying, French and German banks seemed willing to sign on to a rollover plan, and Greece got its new austerity programme through parliament. But it wasn't long before trouble kicked up again.
Moody's and Standard and Poor's have both suggested that the agreed-upon rollover plan might well constitute a default. Since that's precisely the outcome European leaders were hoping to avoid, this news has sent everyone scurrying to come up with a new and better deal. Meanwhile, Moody's has cut Portugal's debt rating to junk. Portugal may well need a new rescue package, which will surely include debate over the fate of creditors, which will mean more questions about bank finances and more brinksmanship. And the European economy continues to slow, even as the European Central Bank continues to tighten policy.
I don't know that there's any broad lesson here, other than: for all the steps already taken by European leaders, the euro zone hasn't really gotten any closer to solving the underlying issues of insolvency and institutional weakness.
EU bank stress tests missing sovereign defaults fail to convince analysts | http://bloom.bg/mWp7xI
Spain debt fears reach new record http://bbc.in/n77k0L
Reuters Analysis: Worsening euro crisis may force bigger rescue fund http://reut.rs/rfcv9m
EconBizFin: Chart: Soaring Spain/Italy bond spreads: the euro zone's "out-patients" get sicker $ECB http://ow.ly/5UrYL - The Economist.
Some European countries may have to be excluded from the euro-zone to make the union more sustainable http://econ.st/qxUmRh
UBS: Euro break-up - the consequences http://bit.ly/oajsgm
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