April 9th, 2010
05:11 PM ET

The next Greek tragedy: default or bail-out?

Greece is in danger of defaulting on its national debt as its bond market comes under increasing pressure, unless its European neighbors intervene.

Analysts believe that the shape of Greece's fiscal future – default or bail-out – could be decided in the coming days.

"We think an intervention over the weekend is a distinct possibility," wrote Stephane Deo, a UBS analyst based in London, in a note to investors.

He said that the falling price of Greek bonds "means that an external intervention may be unavoidable and could happen very soon as the situation is untenable."

He added that a cash injection from the International Monetary Fund is the "most likely scenario" and would solve the country's liquidity problem, at least for now.

Read the full CNNMoney.com story

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Filed under: Greece • World
soundoff (2 Responses)
  1. AC

    Greece is getting a real bargain with the 7.5% market rate – I wouldn't touch Greek sovereign debt for less than 20%, even with hard collateral (presuming default was not inevitable – which it probably is). The Germans are fools to prop up Greece – the Greeks will never pay these loans back, regardless of interest rate.

    April 10, 2010 at 4:07 pm | Report abuse |
  2. John

    Greece needs to make more long-term changes. Whatever bailout they get is just a band-aid, a short-term solution that doesn't solve the underlying problems of the Greek economy. They need to cut government spending, and they can only do this by cutting their extravagant entitlement programs and cutting back on government payroll. Anything else, raising their sales tax on already one of the highest in Europe would only serve to further gut their private sector and shrink their economy. Of course do the Greek people have the courage to tighten their belts instead of rioting in the streets again? I can only hope so, but right now I don't think they realize their current status quo is an economically untenable position.

    April 10, 2010 at 4:49 pm | Report abuse |