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Tuesday, May 10, 2011

Greek Tragedy

The ongoing Greek tragedy continues to unfold before the eyes of a transfixed world.

The Telegraph reports that Standard & Poor's (S&P) warn that investors in Greek debt may have to write off 50% or more of their loans, if financial stability is to be restored to Greece.

S&P warn of the increased risk that Greece will take steps to restructure its £97BN bailout.

As if to help bring about its own prediction, S&P cut Greece's credit rating from BB- to B.

Unsurprisingly the Greek government do not regard S&P's comments, or actions, as being "helpful". They have again denied that that there will be a restructuring and, over the weekend, denied other reports that they may well leave the Eurozone.

Despite the denials, the ongoing increase in negative sentiment in the market towards Greece means that the rumours of restructuring and departure from the Euro may become self fulfilling prophecies.

The demise of Greece is something that the EU may well need to address before the meeting of finance ministers on 16 May.

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