Euro tumbles over new fears on Greek debt

rising expectations that Greece will have to restructure its mountain of debt, possibly as early as the summer, sent the euro and the bonds of weak euro zone members tumbling yesterday in an escalation of the bloc’s debt crisis.

By The Newsroom

Published 19th Apr 2011, 10:43 BST

German government sources said that they did not believe Greece, which sealed a e110bn bailout from the EU and IMF last year, would make it through the summer without restructuring.

That development, combined with a new threat to Portugal’s pending bailout from the success of an anti-euro party in Finnish elections, hammered market faith in the bloc’s ability to avert a new wave of contagion to bigger countries like Spain.

After a brief lull in the crisis at the start of 2011, it has blown up again with full force and some analysts are now openly speculating that Greece and possibly other countries could eventually be forced to exit the bloc.

“You may see some countries deciding to leave the euro because they can’t deal with the fiscal straitjacket that it imposes on them,” said Schroders.

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