Greece gets help from EU in more trouble
EU is ready to support Geece with loans and guarantees such as from the German State-owned Development Bank Kreditanstalt fuer Wiederaufbau (KfW). Any support would come with strong conditions.
Greek Prime Minister George Papandreou, who in recent days met with European politicians, declared in London on Friday evening that the Greek government is planning to implement more austerity measures in accordance with the proposal from EU sources, in order to restore investor confidence in the Greek economy. He also understood that Greece also may need financial assistance, not only the political backing that was promised at a summit last week.
“Financial assistance, if needed,” Papandreou said, according to Reuters.
The Greek bond and stock markets have been unstable since the, by Papandreou newly appointed government, revealed that the deficit in the state budget is much larger than previously thought. It is more than four times as large as that which would be permitted for countries included in the European Monetary Union. Bottom line: Greece is today not up to the EU standards.
Long-term investors have been jumping ship. As reported in two Greek newspapers on Friday – Greek authorities have started to investigate speculative elements in the market identified as American and British brokerage firms as aggressive sellers of Greek bonds.
According to fresh data on Wednesday, Spain is also having bigger difficulties getting out of recession than other Western countries.
Keep a close look on EU during the end of this quarter because the clouds might be gathering again.
Related posts:
- US Futures down on Greece is Spain next?
- EU will not help Greece
- Gold rush points to further economic weakness?
- Standard & Poor grades Greek economy as junk
- World Economy – Ready for the Big Bang?
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