AP - Europe's bailout fund has enough money to cover potential rescues of both Portugal and much larger Spain, while Greece doesn't need a debt restructuring as some investors fear, the head of the fund insisted Thursday.
LONDON — Cyprus’ bailout deal is the fifth agreed on so far in the 17-strong group of European Union countries that use the euro since the debt crisis began in late 2009.
Here’s a look at the rescue programs:
EU and IMF rescue auditors launched a new probe in Greece on Tuesday amid a rising eurozone crisis over talk of debt restructuring and a second bailout.Experts from the European Union and International Monetary Fund will decide if Greece merits a critical new slice of rescue funding, just as a top official at the European Central Bank (ECB) warned that debt default or restructuring would hit the entire eurozone.A restructuring of debt would put Greece's banking system "on its knees", the head of the Italian central bank Lorenzo Bini Smaghi told Italian daily La Stampa.
By Peter Boone and Simon Johnson. This is a long post, about 3,500 words.
In 2003 the International Monetary Fund published yet another internal review with an impressively dull title “The IMF and Argentina, 1991-2001”. But hidden in that text is explosive language and great clarity of thought – in essence, the IMF staff belatedly recognized that their decision to repeatedly bailout Argentina from the mid-1990s through 2002 was wrong:
Brussels responded with barely-contained fury Thursday to the IMF’s claim that it had sacrificed Greece to save the euro from debt crisis contagion.
European Economic and Monetary Commissioner Olli Rehn defended the handling of the debt crisis, accusing critics of dumping “dirty water” on its efforts.
The International Monetary Fund warned Friday that Europe should not put through a 50 billion euro ($67 billion) private-sector restructuring plan for Greek bonds until Athens gets its economy back on course.Antonio Borges, head of the IMF's European department, voiced caution about a European Union plan that includes the private sector in a second rescue package for debt-riddled Greece."This program is still in the books. It still may go ahead in the fall," he said at a news conference at the IMF-World Bank annual meetings in Washington.
Marc Chandler submits:The reprieve on Greek bonds after the successful placement of 5-year bonds (at a hefty premium to existing 5-year bonds) was short-lived. Benchmark 10-year yields are up 23 bp today, while 2-year yields are up 32 bp, bring the total increase over the past five sessions to 71 bp and 62 bp, respectively.In contrast, the pressure on Portugal is considerably more modest but rising.