Monday, January 09, 2012

Germany and France warn Greece on Debt Deal

by Bill McBride on 1/09/2012 07:45:00 PM

A couple of articles ...

From the WaPo: France, Germany warn Greece to make debt deal

France and Germany, the European Union’s key powers, insisted Monday that private creditors must take losses to help over-indebted Greece right its finances, but they also warned the Greek government that E.U. rescue funds will be held back unless it makes a deal soon with the increasingly nervous banks holding its debt.
...
“We must see progress on the voluntary restructuring of Greek debt,” Reuters quoted Merkel as telling a joint news conference after the Berlin consultations. “From our point of view, the second Greek aid package, including this restructuring, must be in place quickly. Otherwise, it will not be possible to pay out the next tranche (of the bailout) for Greece.”
From the WSJ: Greek Bailout in Peril
The spreading recession in the euro zone is also making it harder for Greece and other countries with bailout programs to close their fiscal deficits, economists said. Greece's stubbornly high deficit is raising the risk of a full-blown default on its bonds ...
Usually these negotiations continue right until the last minute. The "spreading recession in the euro zone" isn't helping.