Home » Europe, Financial Crisis » 'It's all over for Greece' as Euro endgame looms

'It's all over for Greece' as Euro endgame looms

submit to reddit

The “endgame” in the eurozone’s debt crisis is fast approaching, analysts declared yesterday, amid growing warnings from politicians and bankers that the reality of a Greek default and possible exit from the eurozone can be denied no longer.

German chancellor Angela Merkel and French president Nicolas Sarkozy will hold a conference call with Greek premier George Papandreou today, as Europe’s big two seek to hold the line that Greece’s debt can be managed in an orderly fashion.

But that possibility was being shot down by market analysts last night. They are preparing for a showdown on Greece by the end of the month, and the possibility of contagion sweeping through indebted nations such as Italy and others, including France, exposed to tens of billions of pounds worth of potentially worthless Greek bonds.

Mrs Merkel sought to play down fears of a Greek default, but spoke as reports circulated in Germany that Berlin had already decided the game was up. One senior German official reportedly said: “Enough is enough.” The report, in Der Spiegel magazine, said Mrs Merkel had now privately faced up to the inevitable, with the only option being whether a bankrupt Greece stays in the monetary union or not.

It follows comments by Germany’s economy minister at the weekend, raising the prospect of a default. EU figures are said to have lost patience with Greece over delays in its reform programme, and will withhold the next tranche of bail-out cash – thus preventing Athens paying public salaries and pensions.

Greece has conceded it is set to miss its first target on privatising public assets, which was a condition of receiving its next tranche of European Union/International Monetary Fund aid. It promised to deliver €1.7 billion (£1.4bn) of state asset sales by 30 September, to show a new income stream was on-coming, but is on course to raise just €400m (£347m).

The sales are being stymied by opposition from Greece’s strong public sector unions. In the case of the state-owned Greek electricity giant DEI, unions have threatened to cut the power supply if privatisation goes ahead.

With speculation that Greece’s bail-out funds may be withdrawn, interest rates on the country’s ten-year bonds shot up to over 24 per cent yesterday. Analysts said that the crisis was now reaching its climax.

Strategists at JP Morgan said: “The endgame on European monetary union is approaching fast.” Julian Callow, chief Europe economist at Barclays Capital, added: “September is likely to be a defining month for the euro area’s destiny.”

Sir Howard Davies, the former deputy governor of the Bank of England, added: “I think it is all over for Greece now.


Rating: 5.0/5. From 3 votes.
Please wait...


Did you like this information? Then please consider making a donation or subscribing to our Newsletter.

Leave a Reply

Copyright © 2009 The European Union Times – Breaking News, Latest News. All rights reserved.