German stance may ‘bankrupt nations’

Germany’s tough stance on banks and bond markets sharing the pain of any euro zone sovereign debt default could force some economies toward bankruptcy, Greek prime minister George Papandreou said today.

“It created a spiral of higher interest rates for countries that seemed to be in a difficult position, such as Ireland or Portugal,” Mr Papandreou said during a visit to Paris.

“This could create a self-fulfilling prophecy … This could break backs. This could force economies towards bankruptcy.”

The comment came after new European Union figures showed Greek deficit and debt levels were higher than previously estimated suggesting it is unlikely the country will reach targets set out in its bailout agreement.

European Central Bank vice-president Vitor Constancio warned today Greece may have to may have to introduce additional measures to meet its budget targets for next year, .

Greece’s 2009 budget deficit reached 15.4 per cent of gross domestic product, significantly above its previous estimate of a 13.6 per cent deficit, Eurostat said. The Irish deficit stands at 14.4 per cent.

The Irish Times

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell