A recent auction on Greek debt showed strong demands. Greece's debt agency sold €780 million ($1.061 billion) apiece of the six- and 12-month Treasury bills at yields of 4.55% and 4.85%, respectively. Greece has a bond due on April 20th, which it has the cash to pay for. However, a bond due on May 19th may be the one that forces Greece to call up its European brethren. Putting the cash together may be an issue for each nation, possibly requiring parliamentary approval from each separate nation.
Prediction are that Greece will tap the aid package by the end of this month. In addition to high interest rates, Greece faces recession risk and a period of very low inflation or even deflation to make its economy competitive again. The mix is poisonous for government revenues that depend on income and value-added taxes. The euro firmed slightly after the Tuesday's T-bill sale but swiftly fell below Monday's closing levels, reflecting those worries.
This could be the beginning of the end for Greece’s debt crisis but it is a substantially new dawn for the Euro Zone, whom hit a road block, and was forced to do something unexpected and icky. Now, the Euro nations will try to assure investors that the rest of its members are stable and secure.
Prediction are that Greece will tap the aid package by the end of this month. In addition to high interest rates, Greece faces recession risk and a period of very low inflation or even deflation to make its economy competitive again. The mix is poisonous for government revenues that depend on income and value-added taxes. The euro firmed slightly after the Tuesday's T-bill sale but swiftly fell below Monday's closing levels, reflecting those worries.
This could be the beginning of the end for Greece’s debt crisis but it is a substantially new dawn for the Euro Zone, whom hit a road block, and was forced to do something unexpected and icky. Now, the Euro nations will try to assure investors that the rest of its members are stable and secure.
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