Report: IMF, Germany Ready to Pull Plug on Greece

Rising bond rates show Spain also heading deeper into crisis
By Mark Russell,  Newser Staff
Posted Jul 23, 2012 9:48 AM CDT

(Newser) – The International Monetary Fund could be ready to cut off fresh funds to Greece, a step that would likely lead to default and getting bounced from the eurozone, reports der Spiegel. The big problem is that Greece has fallen so far behind in its austerity promises—made to secure $158.6 billion in help from the IMF—that giving Greece the additional time it is asking for would require a third aid package costing another $61 billion. "If Greece no longer meets its requirements, there can be no further payments," says Germany's economy minister. "For me, a Greek exit has long since lost its horrors."

story continues below

Without the next round of aid, worth $38.4 billion, Greece could default as early as September. However, experts point out that as the eurozone treaties contain no provision for removing members, it's unclear what would happen after a member default. Meanwhile, international investors pelted Spain this morning, sending its 10-year bond yields soaring above 7.5%. "The higher the yield goes, the more untenable the situation becomes," says one analyst. (Read more Greece stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.