Greece Update

Der Spigel has a story that the economic inspection team in Greece has declared that the country has failed to meet all the targets set by the Troika. In what must be seen as full panic mode on a Sunday, particularly one ahead of the Memorial Day holiday, the Wall Street Journal, has issued a prompt denial, presumably with an eye on the soon to open Asian markets. Link.

A more revealing explanation of the present state of play from Greece, can be gleaned from this New Europe editorial, just out on the internet, which states:

....this brings us to the other crucial question, which is how much will Deutsche Bank be obliged to pay to holders of Credit Default Swaps (CDSs) it has sold on Greek debt, if Athens defaults or is declared in default by the Swaps and Derivatives Association? The procedure for the default to be officially acknowledged is a rather complex business but a good start towards this direction is a “reprofiling”. That is why the European Central Bank governor Jean Claude Trichet is strongly opposing any such proposals. It is not only that the ECB has amassed a wealth of around €80 billion of Greek state bonds. The ECB governor worries more for the uncharted side effects a Greek default may have. Not accidentally, Trichet was joined in this position by the newly appointed head of the Deutsche Bundesbank, Dr Jens Weidmann and the EU Commissioner Ollie Rehn.