Thursday, October 27, 2011

Final Attempt To Save Euro Concluded?

Greek 50% haircut of debt but has it solved the Euro problem? Johann Van Overtveldt says it's just buying time and a similar action will have to happen to Portugal. Under the agreement Greece will be allowed to hold debt-to-gdp well above 100% (target is 120% from the current 160%) with a deadline of 2020 which is not a major achievement by any means.

Van Overtveldt said the recession will likely deepen for Greece because they will have to cut expenditures to increase taxes and Greece will be back on the Euro negotiation tables within 6 months.

"not a structural resolution"
"they are afraid to bite the bullet"
"there is only 1 solution for Greece - to leave the Eurozone"
"there is a huge problem brewing in Portugal"

Johan Van Overtveldt is in charge of Belgium's leading financial magazine and concidered a distinguished Belgian economist.

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