Wednesday, October 27, 2010

More Greek Tragedies To Bring Euro Down: Greece's Deficit Was Actually 15% of GDP

Remember the Greek deficit that went from 3% of GP to 12%? Well, it turns out it was 15%!

FXE straddles anyone?

Eurostat has reported that "once and for all" its 2009 deficit was above 15 percent of GDP.

Reuters reports: "Greece's 2011 draft budget earlier this month estimated the 2009 deficit at 13.8 percent of gross domestic product, but the EU's statistics office Eurostat is expected to revise the deficit upwards in data to be published in mid-November.

"The cost of insuring Greek debt against default rose on Wednesday as risk aversion to the sovereign continued to grow after a series of negative comments, while bonds sharply underperformed German debt. Five-year credit default swaps (CDS) on Greek government debt rose to 720 basis points, up 39 bps according to data monitor Markit"

Prime Minsiter Papaconstantinou said that economy would contract by between 2.5 and 3% next year.

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