Greece will probably get Aid. Maybe?
Greece will probably get the bailout loans needed to avoid becoming the first euro country to default, Fitch Ratings said.And the EU and European Central Bank are still at odds.
While filling a financing hole of about 30 billion euros ($43 billion) next year, the European Union also probably won’t force Greece to extend maturities, a step opposed by the European Central Bank, according to today’s Fitch note.Greece will probably remain shut out of financial markets beyond the scheduled end of the 110 billion-euro bailout in May 2013, Fitch said in a report on its May 20 decision to cut Greece’s credit rating to three levels to B+.
EU and ECB officials remain divided over how to aid Greece, with some European leaders calling for new loans and a debt “re-profiling” -- convincing bondholders to voluntarily accept an extension of maturities.
ECB (central bank) officials have said “re- profiling” is tantamount to default and would prompt the Frankfurt-based central bank to refuse to accept Greek bonds as collateral in their emergency funding operations, wiping out the capital of the Greek banking system, the biggest holder of the country’s bonds.