The Greeks are coming to America


Greece can solve its deficit problems without any help from the IMF or the European Union. Greece actually needs help, but that’s EU’s problem, and the IMF should not be involved. Maybe the IMF should be involved because Germany doesn’t want to pay for a bailout. But Greece doesn’t want help from the IMF because it may require the Greeks to implement even more austerity measures.


If you’re confused, I don’t blame you. These are the messages coming from Europe during the past month or so. Every time there seems to be a solution, something else comes up. I wonder when the marker will realize that despite the last EU agreement, the main Greek problems remains without a solution.


Right after the EU agreement, Greece was happy to issue enough bonds to cover its debt needs for this month. But demand was not impressive, and the few investors who showed up for the auction felt the pain the next day when the prices collapsed.


Greece is now paying even higher interest on its debt than it was before the EU agreement. How they will be able to cut deficit paying those high interest is a mystery to me. And now the Greeks are coming to America in search for investors to buy their bonds.


They’re desperately seeking $5 to $10 billion to help cover its May borrowing requirement of about 10 billion euros to roll over maturing debt and meet interest payments. But they may not like what they will find here.


Why would American investors require a lower interest payment than European investors? Maybe this time a failed auction will make the market realize that despite all the hopes for a solution to the Greek tragedy, there’s not really one.

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