by Bill McBride on 9/21/2012 08:46:00 AM
Friday, September 21, 2012
A plan for Spain will probably be announced next Thursday, and Greece will need additional aid by November.
From the Financial Times: EU in talks over Spanish rescue plan
EU authorities are working behind the scenes to pave the way for a new Spanish rescue programme and unlimited bond buying by the European Central Bank, by helping Madrid craft an economic reform programme ...From the WSJ: Fight Looms on Greek Bailout
The plan, due to be unveiled next Thursday, will focus on structural reforms to the Spanish economy long requested by Brussels, rather than new taxes and spending cuts.
Excerpt with permission.
A report by international inspectors, due in October, will state how big the funding shortfall is in Greece's bailout program, but European officials say the deficit is far too big for Greece to close on its own.
That means the International Monetary Fund, the European Central Bank, and euro-zone governments such as Germany will have to negotiate over which of them will make painful concessions to ease Greece's debt-service burden.
The trio must agree to a plan by November at the latest, when the government in Athens—already in financial arrears—could run out of money altogether.
The €173 billion ($226 billion) bailout plan agreed with Athens in March this year—Greece's second bailout since 2010—is already badly off track, euro-zone officials admit.
Posted by Bill McBride on 9/21/2012 08:46:00 AM