Jan. 27 (Bloomberg) -- Credit-default swaps on Greek sovereign debt surged to a record on concern the government won’t be able to plug the largest deficit in the European Union, a day after it priced 8 billion euros ($11 billion) of bonds.
Contracts on Greece soared 48 basis points to 373, according to CMA DataVision. Swaps on Spain rose 17 basis points to 127, Portugal climbed 18.5 to 149 and Italy was up 10 basis points at 114, CMA prices show.
The European Commission said today that Greece hasn’t done enough to rein in its deficit that reached 12.7 percent of gross domestic product in 2009. Greece denied a Financial Times report it’s wooing China to buy as much as 25 billion euros of bonds.
http://www.bloomberg.com/apps/news?pid=20601087&sid=alfLOEVHkcGQ&pos=4
Comment: Will the PIGS (Portugal, Italy, Greece, Spain) bring down the euro? I do not think so. All of these four countries have many economic and intellectual resources readily available. All it takes is some political will and some outside pressure to bring around the turn-around. It is important, however, that neither the IMF will be needed nor that the European Central Bank will implant a bailout.
Backgrunder on the Greek tradition of corruption
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