greece

ON SPECIALIST MARKETS

The European Central Bank has indicated it will raise interest rates for a second time in four months at next week's meeting.

Ignis' chief economist Stuart Thomson has said it is a "virtual certainty" Greece will default despite its move to implement the latest austerity plan.

If bankruptcy is the inability to raise all the money in tax or borrow the money you need to sustain your expenditures from commercial banks and bondholders, then Greece, effectively, went bankrupt last spring.

European banks and finance officials are discussing a proposal to replace existing Greek debt with a different type of bond to get around ratings agencies' reservations about a planned rollover, Reuters reports.

The FTSE 100 jumped 1.5% this morning, reversing the losses of yesterday afternoon's session.

SHOULD GREECE BE ALLOWED TO GO BUST?

Newton's Paul Brain said the possibility of Greece defaulting on its debt has tripled since a bailout was first agreed, resulting in a higher risk the country could leave the euro by the end of this year.

The euro slumped today as eurozone finance ministers postponed Greece's €12bn bailout package until the country implements tougher austerity measures to curb its soaring deficit.

Announcing a haircut on Greek bond holdings would help restore a positive mood to bond markets, which have largely priced in such a move, said DWS Investments' CIO Asoka Wöhrmann.