EU Finance Ministers to Clarify EU/IMF Agreement

Sunday European finance ministers will hold a teleconference to detail how the rescue mechanism for Greece will work. The Finance ministers will be joined by the European Central Bank and the European Commission. At the present time Greek leaders have not asked the EU to activate the rescue mechanism but consider Sunday’s teleconference important. Greek spokesman George Petalotis said, “Greece has not asked (for) the activation of the mechanism. “ He added” It is an important step to detail the terms of the mechanism.” Markets have viewed the EU/IMF agreement as opaque and short on details. Although Greece has not asked for aid and has said repeatedly that it prefers a market based solution the teleconference is meant to insure the safety net will be ready if needed. A spokesman for Eurogroup President Jean-Claude Juncker stated, “There will be a teleconference on Sunday on Greece in the usual Eurogroup composition. Greece has not asked for help, but you have to be ready if they do”.

High Borrowing Costs Hammer Greece

Markets have hammered Greek bonds and bank stocks during the past week driving the heavily indebted nation’s borrowing costs higher. High borrowing costs could easily push Greece to ask for aid. Greek Prime Minister George Papandreou said in a newspaper interview that the Athens government may be forced to ask for a bailout if markets remain skeptical. Papandreou told reporters, “The question remains whether this mechanism will convince markets just as a gun on the table. If it does not convince them, it is a mechanism that is there to be used.” Greek Finance Minister George Papaconstantinou told reporters that clarification about the details of the EU/IMF agreement is needed. Papaconstantinou said, “The aid mechanism is a very important safety net. We have repeatedly said that it was crucial to create and detail it, but we hope and believe that Greece will not use it.”

Greek T Bill Auction Tuesday

EU members have promised to implement a loan package to Greece should market based solutions fail. On Tuesday Greece will auction 1.2 billion Euros ($1.6 billion USD) of 6 and 12 month T Bills but EU officials would not comment on the timing of Sunday’s teleconference. On Friday Papaconstantinou told reporters, “Until now all (bond) issues have been oversubscribed, that shows that despite the turbulence in bond markets there is interest and trust from investors. Our target remains to have better rates and borrowing terms.” To add to Greece’s troubles Fitch ratings agency downgraded Greece’s rating to BBB- , just above ‘junk’ status.

Quick Forex Tip: Electronic currency trading offers many advantages to the average investor. Anyone can learn how to trade currencies by using one of the many excellent training programs available online for free. In addition many retail forex brokers provide potential investors with training programs and demo accounts. Electronic currency trading offers recession proof trading because in the currency market when one currency falls another rises giving the savvy trader the opportunity to profit from the move.