Bloomberg
May 24, 2011
The Greek government endorsed an accelerated asset-sale plan and 6 billion euros ($8.4 billion) of budget cuts to win extra aid and stem a market slide that threatens to swamp debt-laden euro-area nations.
Belgium had the outlook on its AA+ investment-grade credit rating lowered to negative by Fitch Ratings yesterday as the cost to insure Greek debt against default rose to a record and the yield on its 10-year bonds increased to a euro-era high.
Europe’s debt crisis has deepened as euro political leaders clashed with central bankers after floating the prospect of extending maturities on Greek bonds. That “soft” restructuring may also be accompanied by more loans to Greece, which received a 110 billion-euro bailout last year, now that the government has delivered the additional budget cuts and pledged to speed asset sales.
“There may be slipping, sliding into some sort of re- profiling of Greek debt,” Simon Johnson, an economist at the Massachusetts Institute of Technology, told Bloomberg Television’s In the Loop yesterday. “They may be about to face their own special European Lehman moment.”
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