Greek debt sold off by investors
Only days after an agreement had been reached between the European Union, IMF and the Greek authorities it seems that investors are still concerned about the short to medium-term outlook over Greek government finances. Today we have seen interest rates on Greek debt rise to record highs as investors become concerned that the authorities have still not drawn down any of the emergency funding made available.
Despite the fact that there has been an agreement between the European Union and the IMF to make over EUR30 billion available to the Greek authorities this has still to be accepted by the Greek government. However, if interest rates on Greek debt continue to rise there is no doubt that the authorities will be forced to draw down parts of the emergency funding available. European Union members are willing the government to drawdown part of the fund to stabilise debt markets within Europe and show that the European Union itself is able to fund any potential financial issues amongst members.
There is no doubt that this debacle has gone on for too long now and we need to see an end to the situation in the short to medium term so that the Greek authorities can actually tackle the budget deficit and debt problems.
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