The markets proceed with the review of their plans, including now the scenario of an unsatisfactory solution in the European Summit in March.
The review has to do with two key points that refer to the strengthening of the European Financial Stability Fund and the strict conditions that Germany calls to be integrated in the Eurozone members’ constitutions.
After his meeting with a committee of German parliamentarians, EFSF’s head, Klaus Regling said that triple A rated countries like Germany should increase the amount of guarantees extended to the EFSF, as lower-rated countries such as Spain and Italy won’t be able to increase cash into the fund, given their weak fiscal situation.
At the same time, he admitted that the Fund is unlikely to take over ECB’s role and access the bond market.
Additionally, reactions against Germany’s strict position are intensified even by countries that expressed their agreement until recently to accept the new tax conditions.
In this context the positive market sentiment starts to reverse and is likely to weigh on Greece as the solution of the country’s debt problem was part of the “German package”.
The addressing of Greece’s problem is now postponed until May (or even the second half of the year) but the amount of debt to be included in the lengthening of repayment period will be limited.
However, ECB officials insist that the restructuring of Greek debt in its typical form is still out of the question because of its financial and social impact.
The review has to do with two key points that refer to the strengthening of the European Financial Stability Fund and the strict conditions that Germany calls to be integrated in the Eurozone members’ constitutions.
After his meeting with a committee of German parliamentarians, EFSF’s head, Klaus Regling said that triple A rated countries like Germany should increase the amount of guarantees extended to the EFSF, as lower-rated countries such as Spain and Italy won’t be able to increase cash into the fund, given their weak fiscal situation.
At the same time, he admitted that the Fund is unlikely to take over ECB’s role and access the bond market.
Additionally, reactions against Germany’s strict position are intensified even by countries that expressed their agreement until recently to accept the new tax conditions.
In this context the positive market sentiment starts to reverse and is likely to weigh on Greece as the solution of the country’s debt problem was part of the “German package”.
The addressing of Greece’s problem is now postponed until May (or even the second half of the year) but the amount of debt to be included in the lengthening of repayment period will be limited.
However, ECB officials insist that the restructuring of Greek debt in its typical form is still out of the question because of its financial and social impact.
