AUTOREFRESH 
Amplifying a point we’ve made here before
Even if you get the austerity plan right, the economic pain is tremendous...
If Spain, Portugal, Ireland and Greece are all in fiscal purgatory, it will be slow-growth ahead for the EU, for sure…
Papandreou says EU has devised ways to lower Greek borrowing costs
The EU would intervene in markets if Greek borrowing costs don’t fall, the PM says. Speculators betting against Greece must be made to feel they will lose money, adds the PM.
Short of buying Greek debt or providing debt guarantees it’s not clear how the EU could lower Greek borrowing costs.
EUR/USD trades at 1.3637 after a dip as low as 1.3622.
More support is at 1.3612, the 50% retracement of the 1.3544/1.3679 rally.
Merkel: EMF a good idea as “last resort”
Sounds as though the German chancellor is somewhat less enamored of the idea of a European Monetary Fund to handle fiscal problems like the one facing Greece than she was earlier this week. She says it is a good idea but as a last resort.
The financial crisis will continue to to be an issue in the nlong term, she says.
Stability of the euro is the political responsibility of France and Germany, she says. The EU Treaty is not sufficient to deal woth situations like Greece. Sanctions with more teeth are needed to avoid the problems in the future, she says.
EUR/USD is easing after stalling around the 1.3680 level. It trades now at 1.36545. 1.3620/25 should provide support on dips near-term.
Greece continues to threaten to play IMF card
Greek PM Papandreou is on the wires saying Greece is soing what is necessary to deal with the budget crisis and that it is not trying to find scapegoats for its problems.
He says if Europe does not create an instrument to help Greece then the IMG could be an alternative.
He says he hopes there is no speculation when Greece goes to market.
Nothing kills a rally like a fresh dose of Greece. EUR/USD has stalled on the mid 1.3630s.
Greek crisis is over, rest of region safe, Prodi says
The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, says former European Commission President Romano Prodi.
Well, that’s OK then. Excellent.
Greek report to EU says implementation of deficit plan ahead of schedule
Well that’s a little bit of good news and will be helping underpin EUR/USD.
Greek report to EU
- Says recent data suggest macroeconomic environment has deteriorated
- 2009 base year revision to contract GDP more than 0.3% forecast for 2010
- Little doubt that salary cuts, weaker economy to reduce consumption in 2010
- Stronger global economy suggests some improvement in Greece’s external balance
- No slippages yet on plans to cut spending. Revenue measures being implemented
- Persistence of high yields on government bonds may mean revisions to interest payment forecast
Elsewhere
- Spain’s Economy Minister says 2009 deficit could be lower than previous forecast of 11.4% of GDP
ECB Gonzalez-Paramo says euro zone countries must coordinate their fiscal policies more
- Measures taken by Greece convince ECB, IMF, European Commission
- Best contribution from IMF on Greece is its analysis of the situation
- Responsibility for Greece’s future lies with euro zone countries
Fitch warns Britain and questions Greek rescue as sovereign risks grow
Greek PM speculates that speculation will be high on G20 agenda
C’mon, boys. This cry-baby routine from the Greek PM and FM about evil speculators is getting a little wearying. They continue to moan, despite evidence from the German market regulator BaFin that there has been no extraordinary speculation against Greek debt, just hedging from investors left holding a crap-bag.
Papandreaou spoke to Obama about European efforts on curbing speculation which Obama said were useful and positive, according to the PM.
I’m sure a there will be a 10-point action plan and a blue-ribbon commission will be appointed to look into the matter and report back to the president sometime in 2012…
While all this was going on, the stock market gains evaporated. The S&P is back in negative territory and EUR/USD has slipped back to the 1.3588 level. AUD/USD has dipped to the 0.9125 level, as well.
Greek FinMin on CNBC
Naked CDS trading is the target of Greek officials as they fan out across Washington, appealing for support from the US. The finance minister also says Greece cannot close it s budget gap with interest rate spreads of nearly 300 bp over European benchmark bonds, a valid point but not one that can be easily dealt with without some sort of guarantee from a higher-rated entity.
Here’s a chart to give you some perspective on Greek borrowing rates over the last few years. 4 years ago they were borrowing (and borrowing and borrowing..) at about 25 bp more than Germany. Lately spreads have come down below 300 bp after trading as high as 400 bp at the height of the crisis.
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