“A support plan has been agreed and we are ready to activate at any moment to come to the aid of Greece,” French President Nicolas Sarkozy told reporters in Paris. The EU is “ready to intervene,” Herman Van Rompuy, the president of the 27-member bloc, was cited as saying by Le Monde today.
There have been proclimations before that the EU would step in and thay haven't, so this is far from ironclad.
Further, Greek Finance Minister George Papaconstantinou said today he’s still not planning to seek emergency EU financing. Any EU money would come with restrictions, and Greeks have made it clear they are not into budget tightening pain imposed by the IMF or the EU.
The rolling financial Greek crisis show will land in the U.S. soon. Greece still needs to raise 11.6 billion euros to cover debt that is maturing before the end of May and plans to sell bonds to U.S. investors in the coming weeks. The country’s debt agency announced today it would offer 1.2 billion euros of six- month and one-year notes on April 12.
All this, if the money is actually raised. is, of course,just stop gap. Anyone loaning money to Greece is going to ask for a huge risk premium. The intrest on all the debt will eventually eat up the Greeks.
Anyone doing the numbers knows the Greeks aren't going to make it. It's only a question of whether it is now or next year. If they were shrewd about it, the Greeks would declare bankrupty now. If they wait, it will still happen, but the IMF and the EU will have their claws into them.
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