The Standard Poor‘s downgraded Greece further into junk territory to B, saying Athens may have to write off up to 70 percent of its debt, implying big losses for bond holders. Government officials have ruled out an outright debt restructuring, saying Greece is looking for longer to repay its bailout loans as well as a lower interest rate. (Snap! so is Ireland.) They also want the European rescue fund (EFSF) to buy Greek bonds. At a meeting of select euro zone officials (our Irish Finance minister was not invited) in Luxembourg on Friday, Jean-Claude Juncker, chairman of the Euro group of finance ministers of the 17-nation euro area, said there was a consensus that Athens would require a second rescue.
Jean, did you see Enda ? He is looking for the same deal so why not address both countries problems at the same time?? Maybe you don’t think Ireland is that important ?In anycase Ireland is likely to have a shortfall of at least 20,000,000,000:00 Billion, just to fund daily operations this year and the next 4 years at least! With next to no growth in economic terms this year, it might be even more that that figure. This is before we get the next round of bailout requests from the toxic pillar banks. The interest payments are running around 8-9 Billion. Unemployment is set to grow and I cannot see how we can escape Junk status. With Edna‘s commitment to keep the “servants of the people” from experiencing the true nature of this depression, we as a country are destined to have a longer spell in the doldrums as we might otherwise have had to endure. We are going to have to default in the end but this way we also stand to lose all of the family silver. It doesn’t matter to me what colourful language the politicians use we are heading for a big bang and we will all pay a heavy price including Enda!
European inflation accelerated to the fastest pace in two and a half years and confidence in the economic outlook declined as surging energy prices threatened to undermine growth.
Inflation in the 17-nation euro region quickened to 2.8 percent in April from 2.7 percent, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists had expected inflation to remain unchanged, according to the median of 34 forecasts in a Bloomberg News survey. An index of executive and consumer sentiment slipped to 106.2 from 107.3 in March, the sharpest drop since May 2010, and unemployment held at 9.9 percent, separate reports showed.
Crude-oil prices have soared 38 percent in the past six months, pushing inflation above the European Central Bank’s 2 percent limit and prompting policy makers to raise interest rates this month for the first time in almost three years. At the same time, higher raw-material costs are weighing on consumption and company profits, just as governments across the region cut spending to narrow budget deficits.
“The inflation numbers support the view that the ECB will deliver another interest rate hike before long,” said Aline Schuiling, senior economist at ABN Amro Bank NV in Amsterdam. “Growth was exceptionally strong in the first quarter, but will slow from here. The labor market is still very sluggish and paired with inflation that’s not good for purchasing power.”
The euro was little changed after the data were released, trading at $1.4867 at 11:31 a.m. in Brussels, up 0.2%.
European services and manufacturing growth unexpectedly accelerated in April, driven by higher output in Germany and France, the region’s largest economies. Still, European investor confidence declined as faster inflation and higher interest rates may hurt the recovery. Euro-region growth will slow to 1.6 percent this year from 1.8 percent in 2010, the European Commission forecast last month.
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