Except they were bailed out by the EU/IMF/Germany. Essentially Greece haa already has defaulted as their bonds (10yr) are now junk sitting in no mans land with yields that peaked at 7.5%
No one wanted them.
Now the Greek goverment has to raise money, as part of the austerity plan set out by the EU/IMF, this means a brutal tax regime, funding cuts and general financial/social mayhem. Just to save the necks of a stupid corrupt goverment.
All and all it won't make much difference (the bailout), as the Greek situation sits as the top of a massive problem for the EU, whilst spreads (on debt) widened for both Spain and Portugal. Even as the Greek bailout took place.
The one to watch is of course Spain, a trillion dollar ecomomy with a debt to GDP at 11.20% (probably higher) and unemployment running at 20.05%
Spain will be like an A-bomb on the markets if bond auctions collapse and the country goes into a default spiral.
No comments:
Post a Comment