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EU officials expect Greece to default but stay in eurozone

Posted By admin On September 22, 2011 @ 8:01 am In Money Watch | Comments Disabled

Bruno Waterfield,
London Telegraph [1]
Sept 22, 2011

There is a growing consensus among EU diplomats and officials that Greece will default while remaining inside the eurozone.

Intense talks are taking place in Berlin, Paris, Frankfurt and Brussels about how to manage a Greek default in the short to medium term.

“It is not now but a question of when and how, not if,” said a source.

EU diplomats, both inside and outside the eurozone, now believe that in the single currency long run Greece “may decide to leave” because of its need for depreciation will make it necessary.

  • A d v e r t i s e m e n t

In the absence of other structures, a consensus is emerging that the European Central Bank will have to monetise debt by buying large quantities of Greek bonds to keep banks, especially in France, afloat.

A huge expansion of bond buybacks – the ECB has around €1.7 trillion (£1.48bn) at its disposal – would also be used as a “firewall” to protect Italy and Spain.

Full article here [1]


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URLs in this post:

[1] London Telegraph: http://www.telegraph.co.uk/finance/financialcrisis/8781943/EU-officials-expect-Greece-to-default-but-stay-in-eurozone.html

[2] UK banks abandon eurozone over Greek default fears: http://www.prisonplanet.com/uk-banks-abandon-eurozone-over-greek-default-fears.html

[3] Greece Likely to Default By 2013 as Debts Remain, El-Erian Says: http://www.prisonplanet.com/greece-likely-to-default-by-2013-as-debts-remain-el-erian-says.html

[4] Obama asks eurozone to keep Greece in until after election day: http://www.prisonplanet.com/obama-asks-eurozone-to-keep-greece-in-until-after-election-day.html

[5] Roubini: Greece Should Default, Leave The Euro: http://www.prisonplanet.com/roubini-greece-should-default-leave-the-euro.html

[6] Here’s Why Everyone’s Thinking That Greece Might Default This Weekend: http://www.prisonplanet.com/heres-why-everyones-thinking-that-greece-might-default-this-weekend-read-more-httpwww-businessinsider-comspeculation-that-greece-will-default-2011-9ixzz1xxmxzjd1.html

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