Thursday, 16 June 2011

Is Germany Resigned To A Greek Default?

The Greek crisis has intensified over the last 24 hours, the cost of insuring Greek debt against default has soared to record levels, however tucked away in this Reuters' report is something that proves rather intriguing:
Investors are increasingly unsure whether an agreement on a Greek bailout plan will be reached in the near term as the government's finances dry up. EU and banking sources told Reuters Germany wants the deadline for a second rescue package to be pushed back to September, highlighting the hurdles towards reaching a consensus.
Without aid, Greece runs out of money by the 18th July, so by September Greece would have already defaulted. Has Germany accepted the inevitable? Maybe it's just posturing, either way events are moving much faster than the EU can cope with


  1. The media has been suggesting that the private sector "Would be expected" to contribute to the bail-out. Not if they have any sense!
    I wouldn't "invest" any money with the Greek government even if the interest rate was 100%pa. I'd stand more chance of getting my money back on a rank outsider in the Grand National!

  2. Germany wanted a private sector involvement to protect Merkel from angry German taxpayers. But thanks blackmail from the IMF (rightly concluding it would lead to more Euro contagion for the very reasons you make EP) Germany have retreated on that demand.