Markets Fret About Euro ‘Slow-Motion Car Crash’
May 30, 2011
Reports that Greece has not met any of the fiscal targets set by the International Monetary Fund (IMF) and the European Union (EU) as part of its 110 billion euros ($157 billion) bailout knocked down the euro Monday, as other countries in the euro zone are threatened with being dragged into the Greek morass.
The IMF could withhold its portion of June’s 12 billion euros payment unless Athens can prove it can meet all its financing requirements for the next 12 months.
“It’s high noon again in Europe and the gun is to Greece’s head,” Jan Randolph, Director of Sovereign Risk, IHS Global Insight, told CNBC.com. “The single biggest issue is: Are they going to get the funding?”
A report in the Financial Times suggested that revised plans for Greece’s bailout could include incentivizing private bondholders to extend repayment schedules, which could take some of the pressure off Greece.