Greek crisis intensifies as Joe Stiglitz calls for Europe to 'teach the speculators a lesson'

Telegraph
"Yields on Greek debt rose by 14 basis points, as investors digested the fact that G7 and eurozone finance ministers refused at their weekend summit to provide more detail on a rescue package for the troubled economy.Alongside Portugal, Spain, Italy and Ireland, Greece has been the focus of widespread market selling over the past few weeks, with investors fearing the countries may be unable to repair their balance sheets alone. The interest rate on Greek 10-year benchmark debt is now 6.75pc, compared with fellow euro member Germany’s rate of 3.14pc. Suspicions that the Greek crisis could give way to a full-blown attack on the euro have been reinforced as it emerged that currency speculators have increased their bets against the currency to the highest level since its creation."

Euro under pressure as Greek crisis becomes a 'huge game of chicken'

Telegraph
"The euro faced renewed selling in foreign-exchange markets on Monday morning as doubts about the ability of Greece to cut its deficit heaped pressure on the single currency....The euro fell more than half a cent against the dollar to $1.3630 in early trading and also weakened against sterling as uncertainty over whether Greece will need to turn to the European Union or the International Monetary Fund for a bail-out persisted.Greece's spiralling deficit - estimated at 12.7pc of its gross domestic product last year - stands far beyond the 3pc threshold permitted by the rules of European Monetary Union (EMU) and has left the single currency facing its biggest challenge in its short history."

G7: Europe must rescue Greece

The Times
"FINANCE ministers and officials from the G7 countries, meeting in Canada yesterday, insisted there would be a “European” solution to the problems affecting Greece, Portugal and Spain and no need for an IMF rescue.“We told our partners we had to solve the problem ourselves,” said Jean-Claude Juncker, chairman of the Eurogroup of finance ministers. The difficulties in Greece extended to Portugal and Spain last week, with credit spreads widening sharply, provoking a plunge in local stock markets.Wolfgang Schaeuble, the German finance minister, said the problems would not undermine the euro but warned that Greece would have to make sacrifices.“The euro will stay stable: markets always tend to overreact,” he said. “Greece has to realise that when you break the rules over a long period of time, you have to pay a high price.”

G7 warns IMF not to interfere in Greece

Daily Mail
"Stock markets will remain on tenterhooks after the two-day meeting of finance ministers from the G7 leading nations in Canada did little to ease growing concerns about the deep European budget crisis that has sent the euro and share prices plummeting.Telling the International Monetary Fund to keep its distance, G7 ministers said that there would be a ' European' solution to the problems affecting Greece.European Central Bank president Jean-Claude Trichet said he was ' confident that Greece would meet tougher new belttightening targets'.Greece's budget deficit has mushroomed to almost13% of its national economy. And its debt has kept growing, threatening the economic stability of the entire euro zone.Greek finance minister George Papaconstantinou said yesterday: 'Greece will stick to its deficit-cutting plan. The first three months of the year will be crucial for regaining investors and EU confidence.'

Plunging euro drags sterling to 8-month low amid fears of debt default and concern over UK's ragged public finances

Daily Mail
"Sterling fell to an eight-and-a-half month low against the dollar today as concerns over euro zone sovereign debt problems grew.Worries about public sector debt extended beyond Greece to Portugal and Spain, hitting riskier assets, with sterling falling in tandem with the euro against the dollar.Concern over Britain's public finances, and political uncertainty ahead of a general election due by June also weighed on sterling sentiment - even though the two currencies are separate fluctuate in value against one another."

Stock markets plunge over Europe debt fears

The Times
"European and American stock markets plunged yesterday as investors took fright over the difficulties in debt-ridden countries such as Greece and Portugal and fears mounted over the health of the world’s biggest economy.There were concerns that Greece may not meet its tough budget plans as workers started the first in a wave of strikes, prompting worries that Spain, Portugal and the Irish Republic may also struggle to cut their soaring debts. In a sign of the scale of the problems, a gauge of the perceived credit risk of Western European nations overtook that of the most stable US companies for the first time. ...This came as the Monetary Policy Committee (MPC) of the Bank of England voted to call a halt to quantitative easing, saying it was expecting “gradual growth” in the UK economy. However, it gave warning that repairing the UK’s public finances would weigh on consumer spending. There were stinging losses on Spanish and Portuguese stock markets...."

European economy panic leads to euro tumble and jolt in stock market

Daily Mail
"Fears that the European economy is teetering on the brink of a new economic crisis sent the euro tumbling and jolted stock markets lower today.The FTSE 100 slumped 113 points to 5139 points, the lowest level since November 2009.The single currency plummeted to its weakest since June amid concerns that the budgetary woes faced by Greece would are being mirrored in the debt-laden economies of Portugal and Spain."

But not yet...

Burning Our Money
"Everybody now agrees that public spending has to be cut significantly. But not everyone agrees on when. And despite what we may sometimes suggest on BOM, not everyone who says we can put it off is an out-and-out scoundrel."

End money printing today

John Redwood
"Will the MPC make honest people of us at last? With inflation well over 3% and rising it is high time they said “No” to more easy money for a government awash with too much debt and wasting far too much money. They should grasp that recovery requires a private sector, export and savings led recovery. That in turn requires a government spending sensibly and gaining us some better value for money..."

Tories will need emergency Budget for Britain to avoid the risk of a Greek mess

Telegraph
"..But while Osborne was mainly trying to allay the market’s fears there was also something in his speech for ordinary voters in the promise to “Get Britain working”. Similarly, private-sector employers were cheered by his entreaty to “improve Britain’s international rankings for tax competitiveness and business regulation”.So the Tories have got step one right in delivering the correct messages on economic reform – mixed messages but ones consistent with recovery. But if Osborne is to carry the support of business leaders, such as the seven who publicly backed him yesterday, then he must get step two right, which is delivery.That needs to start with the emergency Budget 50 days after an election. If he fails he will be quickly found out – not just by the business leaders backing him at the moment, but by the markets and with disastrous consequences for Britain."

Greece under EU protectorate as funds shift fire to Portugal

Telegraph
"The European Commission has ordered Greece to slash public spending and spell out details of its austerity plan within "one month", invoking sweeping new EU Treaty powers to impose a radical shake-up of the Greek economy."

Greece rattled by 'hidden debt' controversy

Telegraph
"Greek debt markets have come under fresh assault from hot money funds after a commission of experts in Athens told the country's parliament that it had uncovered €40bn (£35bn) of "hidden debts" during an investigation into past manipulation by the financial authorities."