Wednesday, October 27, 2010

Betting on Debt Restructuring in Europe

by Jack Ewing

New York Times

October 26, 2010

In a rebuke to European policy makers, many investors remain convinced that Greece and other so-called peripheral countries in the euro zone will eventually have to restructure their debts or even default, according to a questionnaire submitted to money managers by Barclays Capital.

The finding suggests that massive efforts by the European Union, European Central Bank and International Monetary Fund to prop up Greece, Portugal, Spain and Ireland have provided only temporary relief from the market turmoil their problems have caused.

The questionnaire sent to 582 Barclays clients, including traders, hedge fund managers, and corporate money managers, found that 82 percent expect either a debt restructuring in one of the peripheral countries, an outright default or a deeper crisis that could lead to the breakup of the euro zone.

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