222 intraday shocks
three major European markets lower as of 20:11 GMT, the United Kingdom FT100 index at 5899.30 points, down 28.90 points, down 0.49%; German DAX30 at 6836.90 points, down 71.28 points, down 1.03 %. ; The French CAC40 index at 3448.15 points, down 17.09 points, or 0.49%. Click here >>> global stock market
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Europe reached € 130 billion Greek bailout
After more than 12 hours-long discussion, the 17-country euro zone finance ministers decided to approve a total of 130 billion euros (about 171.8 billion U.S. dollars), the second round of the Greek rescue plan.
However, analysts believe that the move although the solution of the Greek “urgent”, for the time being to avoid defaulting on its debt, but its debt risk alert has not yet completely eliminated.
themarket performance has been able to describe the problem. To last night deadline, the major European stock indexes generally fell early soared the euro has fallen very sharply, into a slight decrease of approximately 0.29%.
defaulting on its debt temporarily to avoid
President of Euro Group Juncker said in a news conference after the end of the meeting of eurozone finance ministers, the euro zone finance ministers on a new round of Greek salvage agreement and debt write-down program to reach consensus on far-reaching goal is to make Greece in 2020, the proportion of its debt to gross domestic product reduced from the current 160% to 120.5%.
According to Juncker, the debt write-down program is expected to start in the next few days. Private creditors will be about 200 billion euros of Greek government bonds held 53.5% of the write-downs, write-down rate than 50% of the 10 summit EU summit to go, to replacement of some existing Greek government bonds, bond coupon rate was once again lowered.
In addition, the euro area member states central bank is expected to be of Greek government bonds held by the future may bring part of the revenue is returned to the Greek government, this will enable the financing needs of Greece reduced by 1.8 billion euros. At the same time, the euro-zone countries is also expected to be disbursed to Greece about 56 billion euros in the first round of bailout loans, interest rates from the current 2-3 percent higher than the market interest rate fell to 1.5 percentage points higher than the market interest rate.
after the second tranche of bailout loans, the Greek government will be avoided due to inability to pay the national debt of 14.5 billion euros due in 3 copies to declare breach of contract.still nearly 50 billion funding gap
Greek problem was finally ushered in a key to the good news, but we look at the various comments, economists widely expected, even if the agreement was reached , the market will be retained in a long time to reduce Greece’s debt burden, the ability to repay the debts doubt.
a clear evidence that the IMF (International Monetary Fund, referred to as the IMF) in a confidential report suggests the Greek rescue package is still very fragile. The IMF this will provide some of the Greek bailout funds. There is a fundamental conflict between debt relief and improve the competitiveness of the program objectives
“enhance Greek competitiveness required for internal devaluation will inevitably push high recent debt to GDP ratio. Reuters got this date for the 215-day report said.
“This will lead to rising debt curve, may be as high as 160% debt to GDP ratio by 2020. Taking into account these risk factors, the Greek relief plans still possible variables, and sustainability The problem still exists. “also known as the report.
report on that analysis, the financing needs of Greece in the second round during the rescue plan will be 170 billion euros, unless other measures to reduce debt. The rescue plan until 2014.
with € 130 billion rescue package, which also means “in the 2015-2020 period, in the case of not taking action to reduce debt, official financing needs may have to require additional € 50 billion If Greece in 2020 before the last few limited market access, then the data may be a little lower. “
even ignored Greece’s long-term funding gap still exists the fact that, in the short term to get sufficient funds to Greece could not give the full confidence of the market. The analyst said that the above relief agreement needed the approval of the euro-zone part of the national parliament, which brought uncertainty. More critical in the next few, Greece, designed to ensure that the rescue plan calls for tightening, the program will face further challenges.
theAnalysts say the light of the general election tentatively scheduled to be held in four, in the case of seething popular discontent, the Greek political factions for the support of Parliament has just approved the austerity measures may become more and more cautious. Samaras, the New Democratic Party leader, has promised parliamentary election victory will side with the international relief re-start negotiations, which further exacerbated the concerns of market participants.
the Oxford Economics in economist Marie Diron said that while the euro-zone government, the Greek political factions need to let people at home to accept a very harsh austerity measures. For a technocratic government, this can be done, but the elected government after the election to deal with these two goals will be much more difficult.
“If the new Greek government, like the first round of relief, as once again kept his word, then the remaining trace of trust between the Greek and international relief will be the total collapse, when the European Union and other institutions may suspend the rescue loan Greece will again be faced with defaulting on its debt. “(Oriental Morning Post)
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