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Saturday, 14 January 2012

Greek debt problem remains unresolved

Greek bond holders refuse to lose more than initially agreed.  Negotiations have broken down, risking failure of Greece's second bail-out.  See Financial Times' article "Greek debt default threat grows".

Either bondholders agree to suffer a bigger "haircut" loss;  or Greece's second bail-out package will have to be increased.  They've already agreed to a 50% haircut, but now it needs to be worse.  If no agreement is reached Greece will probably default on the 14.5 billion euro debt to be repaid on March 20, 2011.

  And who would ever bail anyone out twice?

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