EU Regulators to Monitor Greece Plan

123jump.com Staff
03 Feb, 2010
New York City

Greece, Spain, Portugal and Italy worries currency traders in Europe. Greece today won an endorsement from the EU regulators as it prepares to lower its deficit sharply in one year. Spain and Portugal will face difficult choices in the next few months.

[R]8:30 AM New York – Greece, Spain, Portugal and Italy worries currency traders in Europe. Greece today won an endorsement from the EU regulators as it prepares to lower its deficit sharply in one year. Spain and Portugal will face difficult choices in the next few months.[/R]

Investors in Europe still remain focused on the rapidly evolving situation in Greece and a possible wider contagion spreading to Spain and Portugal.

Greek bonds edged higher today after EU regulators publicly endorsed the Greek government program to lower its deficit.

The yield premium to the German Bund declined 19 basis points to 335 basis points. The yield on the bonds due in 2019 decreased 13 basis points to 6.58% and on the five-year bonds due in 2014 decreased 18 basis points to 6.3%.

European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said, “We are endorsing the Greek program.” He also stressed that the commission has required frequent updates on the implementation plans from the Greek government as it battles to lower the deficit from 12.7% to 3% as required by the EU.

George Papandreou in a televised speech said, “Greece is the center of a speculative game aimed at the euro.” He further added that civil servant pay will be frozen and asset sale and higher tax collection will help to bring down the deficit.

Greece is not the only problem that the EU regulators are battling with. Spain is estimated to have 2009 budget deficit of 9.5% and Portugal’s deficit is near 9.3%. Italy is also struggling with its budget deficit and large debt load that is above 110% of its gross domestic product.

EU Retail trade Stable

Retail trade sales in December remained stable compared to November in euro area EA16 and fell 0.1% in the EU27. In November retail trade decreased 0.5% in both zones.
Compared with December 2008 retail sales index decline 1.6% in the euro area and 1.0% in the EU27.