Current Events Economy 2

Current Events Economy 2 - holders — now mostly from the...

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Greece's economy is about the same size as that of Massachusetts. The eyes of the world are on debt-ridden Greece as the country struggles to placate the EU and markets with spending cuts and strains to raise money to avoid default.Greece's latest austerity measures, announced Wednesday and worth euro4.8 billion ($6.5 billion) in savings, were aimed at convincing the world that it can handle its debt load, making payments and borrowing to roll over debt that's coming due. The country desperately needs to raise money on the bond markets, the normal way for countries to finance public sector activities like building roads and schools. Some reports suggest Greece may also look to issue bonds in private placements, in which the bonds are not then typically traded in the secondary market as syndicated bonds can be. The Greek government already sells 5-20 percent of its bonds in this manner, but they are usually held in order to diversify debt
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Unformatted text preview: holders — now mostly from the eurozone — and to fine tune the makeup of its debt rather than to avoid exposure to market forces. Resorting to private placements could also be interpreted by markets as a lack of confidence, the very thing Greece is keen to recover. Spreading from one European country to another, these debt troubles could lead to a pullback in bank lending, slowing the continent's economy further. That in turn might have an indirect effect on the recovery in the United States as Europeans reduce their demand for American products, effecting our economy as well. It just goes to show, that even when one country is in high debt, it can affect everyone else. hpid=topnews&sid=ST2010030405002...
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