June 14, 2011
Euro zone finance ministers met on Tuesday for fresh talks on a new bailout for Greece, which was hit by another ratings downgrade on Monday. Meanwhile, the ECB signaled it won't sign up for any new funding for Greece, and Germany might get its way on involving private investors in a new rescue.
Euro zone finance ministers are meeting in Brussels to discuss a second bailout for Greece, with Germany demanding that private bondholders should contribute to a rescue.
Reuters cited euro zone sources as saying that no decisions were expected at the meeting, which will lay the groundwork for further discussions among finance ministers on June 20 ahead of a European Union leaders' summit on June 23-24.
Greece suffered a further setback on Monday when the rating agency Standard & Poor's downgraded its credit rating it to CCC from B and warned that Greece was at increased risk of defaulting. Greece now has a lower credit rating than countries such as Pakistan and Ecuador. The cost of insuring Greek debt is now almost twice as much as the price of insuring Pakistani bonds.
Athens criticized the downgrade, saying it ignored the fact that talks were underway with the EU and the International Monetary Fund (IMF) aimed at finding a solution for its finances.
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