We will have a mirror site at http://nunezreport.wordpress.com in case we are censored, Please save the link

Thursday, April 28, 2011

Hole in Greek finances bigger than thought as bond flight continues

Fears that struggling eurozone nations will not be able to pay their debts intensified as official data showed the hole in Greece's finances was bigger than thought.


Fears that struggling eurozone nations will not be able to pay their debts intensified as official data showed the hole in Greece's finances was bigger than thought.

The deficit in the Greek government's budget amounted to 10.5pc of GDP in 2010, EU statistics agency Eurostat reported on Tuesday, putting it significantly above February's 9.6pc estimate from Brussels.

The continued flight from Greek sovereign debt pushed the yield, or return, on the 10-year government bonds to new highs of 15.5pc.

The European Central Bank, the only major potential buyer, "won't buy whilst [some eurozone countries such as Germany] continue to speak and put pressure on Greece to restructure", said one trader.

A restructure of Greek debt, cutting the interest rates and lengthening the terms of the loans, would represent an effective default as the debt would be worth much less.

In late 2009 a more dramatic revision of Greece's deficit sparked Europe's debt crisis as it ignited fears about the state of weaker eurozone nations' finances, eventually leading to Athens last year receiving a €110bn (£98bn) bail-out. Ireland and Portugal have since followed in requesting international aid.

The Greek finance ministry said the latest "deviation" was "mainly the result of the deeper than anticipated recession of the Greek economy that affected tax revenues and social security contributions".

Athens had planned to cut the deficit from 15.4pc of GDP in 2009 to 8.1pc for 2010.

"The revision shows how difficult the government's job is of sticking to its fiscal promises against a backdrop of an extremely weak economy," said Diego Iscaro, an analyst at IHS Global Insight. "The figures will do nothing to end the constant rumours of debt restructuring we've had in recent weeks."

Despite denials from Greek and EU officials, the pricing of credit default swaps - instruments that insure the debt - signalled a 66pc chance of Greece defaulting within five years, according to data tracker CMA.



hostgator coupon 2011

No comments:

Post a Comment