Friday, November 19, 2010

Have Greece's Problems Been Resolved?

by Marc Chandler

The Street
November 18, 2010

One might be forgiven for thinking that a 110 billion euro European Union/International Monetary Fund package would suffice for Greece and stabilize its situation as IMF packages typically do over time.

However, over the past month, 10-year Greek yields have risen 260 basis points, and talk of debt restructuring continues to be heard.

The government presented its final 2011 budget Thursday as European Commission, IMF and European Central Bank officials called for the periodic checkup. There is much to like in what Greece says. It remains committed to reducing the deficit to 7.4% of GDP in 2011 and has increased the savings to 5 billion euros from 2.2 billion euros in last month's draft. Initially, it had projected it would need only 1.5 billion euros in savings.


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