The assessment that the European Central Bank has more room to “tolerate” a possible restructuring of the Greek debt, compared with the positions expressed in recent months officers, expressed by Citigroup and Deutsche Bank, according to a report of the agency Bloomberg. The ECB’s rules are less clear than the warnings in recent days that the Greek bonds will not be accepted as collateral in case of restructuring, and only mention that such a step “would be guaranteed” if the ECB officials consider necessary.
The rhetoric of the ECB in order to put pressure on Greece to step up fiscal adjustment is … as to define a line in the sand, says Bloomberg citing economists of Citigroup and Deutsche Bank. “Without warning the ECB, the Greeks would not have announced additional measures,” says Juergen Michels, chief economist at Citigroup in the eurozone. “The ECB has shown early on that it can expand greatly the interpretation of the rules on acceptance of guarantees,” he adds. Forex Broker report: EURUSD stands at 1.4180 – May 26.
Following the comments from Moody’s that “a bankruptcy will likely lead the rating of Greece in the Ca or C and will remain at the level of Ca and Caa for some time” as Gilles Moec and Mark Wall at Deutsche Bank estimate that this might require the ECB in some sort of “compromise.” And recall that in May 2010 the ECB decided to force the minimum requirements for acceptance of securities in response to the evaluations of Greek government bonds, just four months after the statements of Jean-Claude Trichet who asserted that “the ECB will not change the rules through a single member.
“Probably there is a limit to the ECB’s commitment to ‘restructuring’. If the ECB maintains this attitude, then we must face the responsibility of the ensuing crisis in the Greek banking system “they write, adding:” The ECB will assume responsibility for the deteriorating situation I doubt it very much. “
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Eurozone: Remained to 10% the unemployment in July
Remained unchanged the unemployment rate in the euro area in July at 10%, but the number of unemployed rose for the third consecutive month, a sign that the recession in the euro area may have begun to affect the labor market. According to Dow Jones Newswires, the number unemployed in the euro area rose by 61,000 in July, after increasing by 24,000 the immediately preceding month and 64,000 in May, as reported today by Eurostat. The seasonally adjusted unemployment rate for the 17 euro countries remained unchanged, while the data for the two previous months were revised upward from 9.9% to 10%. The average estimate of analysts spoke unemployment rate of 9.9%, according to a poll of Dow Jones Newswires. The unemployed in the euro area amounted to 15.8 million in July, which is 247 mm less than the corresponding period.