Tuesday, January 24, 2012
U.S. stocks decline as Greek debt deal remains uncertain
In spite of recent announcements that a deal was near, U.S. stocks declined this morning (Jan. 23) as there still seems a stalemate. European finance ministers are pushing bondholders to provide greater relief for Greece.
The bondholders have been pressing for a four per cent interest rate at the least on new bonds that would be issued to replace the Greek bonds already held. The new bonds will have only 50 per cent of the value of the old bonds. This will help relieve Greek debt.
If a deal is not made then Greece will not receive bailout money that will enable it to pay debt coming due in March. If Greece defaults this could cause serious turmoil in financial markets to say the least. For much more detail on the situation and explanation of what is at issue see this CBC article or this BNN article.