Investors still nervous on Greece

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  • xman
    Admin
    • Sep 2006
    • 24007

    Investors still nervous on Greece


    Investors are still nervous over plans to rescue the Greek economy, despite indications of progress on bail-out talks over the weekend.Interest rates demanded by investors lending money to Greece are close to record highs - a sign that fears remain over Greece's ability to repay loans.

    Greece has been forced to request 40bn euros from the EU and International Monetary Fund (IMF).

    But the details of the bail-out deal have not yet been finalised.

    There is also concern that European partners in the deal - particularly Germany - are reluctant to participate in the bail-out.

    On Monday, Greek bond yields - the interest rate that Greece must pay to borrow money on the international markets - were just below the 9.15% record seen last week.

    The interest rate is 6.14 percentage points higher than that charged to Germany - seen as the safest investment in Europe.

    That is the largest spread in bond yields for 12 years.

    Greek Finance Minister George Papaconstantinou said talks with the IMF over the weekend had progressed well, with the head of the IMF, Dominique Strauss-Kahn, saying that a deal would be agreed "in time to meet Greece's needs".

    Negotiations must stick to a series of deadlines, with 8.5bn euros needed before 19 May, when it faces its next bond repayment.


    The IMF is expected to provide 10bn euros of support this year, with eurozone nations providing a further 30bn euros. But the scale of assistance after this year remains unclear.This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.


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