Monday, 12 April 2010

Eurozone earmarks 30bn for Greece

Greece's fellow Eurogroup members on Sunday pledged 30 billion euros for a financial rescue package for the beleaguered nation, should it be needed. A further 15 billion euros are earmarked by the International Monetary Fund, media say. The European money would be disbursed at 5 percent, slightly above the IMF's lending rate.

It is the first time that the rescue package, under discussion since early Febraury, has been accompanied by specific figures.Greece stressed that it has not yet asked for the activation of the rescue plan, and feels that its mere existence with specifics is enough to calm money market fears enough to allow Greece to borrow viably.

The news seemed on Monday to have lowered Greek bond spreads with the German bond (spreads for the 10-year bond stood at 343 basis points at the time of this posting, down from a high of 456 basis points last week, which would have led to borrowing rates of about 7.5 percent). The Athens Exchnage rallied 3.5 percent and the euro also rallied on Monday.

Financial Times:

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