Greek default now a foregone conclusion
Greek debt now yields over 23 percent. Default is all but certain
Yesterday and today Greek government bond yields continued to increase as EUROSTAT announced worrying year-end budget deficit figures for the beleaguered economy .
The two year Greek government bond now yields above 23% reaching an all time high as we approach the one year anniversary of the EU's historic massive bailout package. The annual budget deficit of Greece exceeded expectations at 10.5% of GDP.
The latest results now show that the total indebtedness of Greece stands at 142% of GDP. Default is now beginning to look like a foregone conclusion.
The only question is whether European politicians follow the recommendations of the IMF and most clear-eyed economists and move to rapidly restructure Greek debt. This would give the politicians in Athens some breathing room to implement austerity and reform without the moral hazard of relying on responsible countries’ taxpayers for bailouts. The alternative is to continue to throw good money after bad in a losing battle.
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