September 24, 2011
Germany's finance minister raised questions on Friday over whether a hard-won second bailout for Greece agreed by European leaders in July would go ahead as planned, as more official concerns emerged over Greece ability sustain its heavy debt burden without default.
Prices for Greek government bonds have collapsed in recent weeks amid growing investor doubts over whether the country can surmount a financial crisis if it doesn't cut its debts sharply.
"We now expect the Greek sovereign to engage in substantial and probably coercive debt restructuring by the end of 2012 at the latest and likely much sooner," said Citibank economists in a research note on Friday.
The German minister, Wolfgang Schäuble, hinted Friday that he expected an €8 billion ($10.8 billion) payout to Greece from euro-zone governments and the International Monetary Fund to go ahead soon, as part of Greece's first bailout agreed last year.
But he suggested the conditions for a second bailout could be changed.
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