The European Commission “stands ready to assist the Greek government in setting out the comprehensive consolidation and reform program, in the framework of the treaty provisions for euro-area member states,” said Joaquin Almunia, who is in charge of economic and monetary affairs, in a statement late yesterday. He didn’t say what form any assistance could take.
Almunia’s comments come as investors debate whether EU governments would bail out Greece if it was unable to pay its bills. Former German Finance Minister Peer Steinbrueck said in February that euro members would “in reality” rescue states in difficulty. Almunia said yesterday Greece “is a matter of common concern” for euro nations, echoing language he has used since November. He didn’t elaborate further.
“The situation in Greece is very difficult,” European Central Bank President Jean-Claude Trichet said Dec. 7. “We all know the figures, and we all know the very important, courageous decisions that have to be taken to put the situation back on track.”
Greece Government Bonds Tumble
Bloomberg is reporting Greece Government Bond Tumble Fails to Entice Pictet, Frankfurt.
The biggest drop in Greece bonds in more than a decade isn’t enough to entice some of Europe’s biggest fixed-income investors amid deepening concern the nation won’t be able to fix its deteriorating finances.
Frankfurt-Trust Investment GmbH, Smith & Williamson Investment Management and Pictet Asset Management, which manage a combined $100 billion, say they are not ready to buy even after the biggest tumble in two-year notes since 1998. Standard & Poor’s put the nation’s debt on watch for a downgrade two days ago, and Fitch Ratings followed yesterday by cutting Greece’s credit rating one level to BBB+ from A-.
S&P said two days ago Greece’s debt burden may climb to 125 percent of gross domestic product in 2010, the largest among the 27 European Union nations, and stay at that level or higher in the “medium term.”
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