- CNTV English - CCTV News

Homepage > News > Biz >

Concerns mount over Greece's deficit

04-29-2010 09:25 BJT Special Report: Europe's Debt Crisis |

BEIJING, April 28 (Xinhuanet) -- The International Monetary Fund is said to be looking at raising its share of Greece’s financial rescue package by 10 billion Euros (13.2 billion U.S. dollars) amid fears that a planned 45 billion Euro bail-out will fail to prevent the country's debt crisis from spiralling out of control.

Stocks around the world took a dive Tuesday as Portugal showed signs it too was being affected by the crisis. Europe faces renewed economic turmoil after Greece's credit rating was slashed to "junk status" by Standard and Poor. Portugal was also downgraded by the agency.

On Wednesday Greece's securities regulator banned short-selling in shares on the Athens bourse until June 28 after investors responding to the country's deepening debt crisis ditched Greek assets a day earlier.

European shares dropped in early trading Wednesday, following falls on Wall Street and a slide in Asian markets overnight. There are mounting concerns that Greece's debt problems will spread and that public opposition in Germany against bailing out debt-stricken Greece could hamper efforts in pulling Greece from the quagmire of economic ruin.

In the U.S. the Dow sank 213 points, or 1.9 percent, and the S&P plunged 2.3 percent. The Nasdaq also dived some 2 percent. Meanwhile Asian markets saw similar losses. Japan's benchmark Nikkei index lost 2.6 percent and the Hang Seng in Hong Kong closed 1.4 percent lower. The Shanghai Composite also declined 0.3 percent. Concerns about a euro zone debt crisis has helped strengthen the dollar which climbed 1.5 percent against the euro on Tuesday to 1.3176 dollars.

In Britain where an election campaign is in full swing, some newspapers were warning that the country needed to take action in order to avoid similar problems faced by Greece. The Daily Mail said that Britain had a similar deficit ratio to Portugal and warned that if the national debt was not reduced immediately, Britain's credit rating also risked being downgraded with devastating results for interest rates and the pound. Conservative leader David Cameron also voiced his concern. "This is a warning of what can happen if you don't pay back your debts," he said. But Prime Minister Gordon Brown has said Britain would not go the same way as Greece.

In Greece the interest rate on two-year government borrowing ended Tuesday at 13.5 percent and some commentators have said it is now considered safer to lend money to Iraq or Venezuela than to Greece.

When ratings agencies downgrade the country's credit rating it means they think it is a riskier place to invest. If it reaches junk status, a country loses its investment grade status. The dilemma is what to do about the situation. While Germany's Angela Merkel initially backed plans to bail out Greece, she has faced a public back-clash.

"Germany will help if the appropriate conditions are met," Merkel said. "Germany feels an enormous obligation towards the stability of the euro. If Greece is ready to accept tough measures, not just in one year but over several years, then we have a good chance to secure the stability of the euro for us all." However she did not elaborate on what conditions would be put forward though Merkel rejected the idea of expelling Greece from the eurozone.

Greece's budget deficit last year was 13.6 percent of GDP, one of the highest in Europe and more than four times the limit under eurozone rules.

The country's debt currently stands at about 300 billion Euros. Because of the impact on the common European currency there are fears that Greece's troubles in the international financial markets will trigger a domino effect, toppling other weak members of the eurozone, such as the so-called "Piigs", Portugal, Ireland, Italy and Spain as well as Greece, all of whom face challenges to re-balance their books.

Editor:Du Xiaodan |Source: Xinhua

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program