Monday, 19 September 2011

European debt crisis: Greece in focus

Europe's sovereign debt crisis appears no closer to resolution after talks in Poland over the weekend. Reuters reports:

EU finance ministers broke no new ground in dealing with the euro zone debt crisis in discussions over the weekend, instead absorbing some ideas and rejecting others and taking stock of progress on agreed steps.

Investors seem to be expecting something dramatic to happen eventually though. From WSJ:

A majority of investors expect the euro zone's debt crisis to end with massive central-bank buying of bonds, but almost a quarter expect the breakup of the currency bloc, a Barclays Capital survey of more than 500 institutional investors showed...

Of the 500 investors surveyed, 56% expect the European Central Bank will undertake large-scale buying of sovereign debt from troubled countries like Italy and Spain, with some seeing fiscal union as the end result...

But 24% of those surveyed said that they expect a euro-zone breakup lies at the end of the sovereign debt crisis...

Greece is at the epicentre of the crisis and is likely to remain a focus of investors' attention. From Bloomberg:

Greece’s ability to avoid default hangs in the balance this week as international monitors get set to assess whether Prime Minister George Papandreou can meet the conditions of rescue loans.

European Union and International Monetary Fund inspectors hold a teleconference call today with Finance Minister Evangelos Venizelos, to judge whether the government is eligible for its next aid payment due next month and on track for a second rescue package approved by EU leaders July 21.

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