Concern over Greek debt has again come to the forefront in recent weeks. After receiving a €110 billion loan in May 2010, it now seems that the country is in need of a second financial bailout from the European Union (EU) and the International Monetary Fund (IMF). The loan, which could be up to a further €100 billion, could help to ensure that Greece is able to continue to service its debt and meet financial obligations over the longer-term.
Private companies and banks have been put under pressure to allow Greece to extend (or restructure) the repayment of any debt owed to them. However, credit rating agencies have warned that this would be viewed as a default and could lead to further downgrades. Greek debt is already rated below investment grade, and the impact on investor sentiment and the wider implications of further negative re-ratings could be huge.
Read the full analysis from SEI – Greece, Europe in Renewed Turmoil