Last week Eurozone finance ministers came to an agreement regarding the latest Greek bailout. This week policy makers must try and structure a buyback in order for Greece to receive the additional funding it sorely needs.
Today, while EU finance ministers meet in Brussels once more Greece will reveal bids to repurchase bonds issued earlier in 2012.
Greek debt rallied after it was announced that the Athens-based Public Debt Management Agency is willing to spend up to 10 billion Euro’s on re-buying bonds, exchanging them for six-month bills issued by the Eurozone rescue fund.
Now, in a surprising twist, German Chancellor Angela Merkel has intimated that once the struggling nation has a budget surplus Germany might support writing off Greek debt.
This stance is a complete turnaround from that previously adopted by the Eurozone’s largest economy.
At all prior levels of negotiation Germany has held fast to its view that writing off Greek debt would infringe on European Union treaties.
However, during an interview with Bild am Sonntag Merkel stated: ‘If Greece one day can rely once again on its own revenue, without having to borrow, then we’ll have to look at this situation and make an evaluation.
The Chancellor, who is going for re-election in 2013, went on to assert: ‘The idea that Greece would have to leave the Euro against its will would still cost us much more money than the path we’ve chosen, and cause great harm to our economy. We need to avoid all this uncertainty.’
Although these were the most positive noises made yet by the European superpower on this issue Merkel did go on to stress that if such action occurred it wouldn’t be until at least 2014/2015, and that it would only happen ‘if everything goes according to plan’.
As of 11:02 am
The Pound to Euro exchange rate is currently trading at 1.2322
The Pound to US Dollar exchange rate is currently trading at 1.6063
The Pound to Australian Dollar exchange rate is currently trading at 1.5410
The Euro to US Dollar exchange rate is currently trading at 1.3036
The Euro to Pound exchange rate is currently trading at 0.8115
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