Greece issues bond to raise money

Seven-year bond aims to raise billions of dollars for debt-ridden country.

    The announcement of Greece's austerity plan to solve the debt crisis led to strikes and protests [AFP]

    Debt crisis

    The yield on Greek 10-year bonds rose again on Monday to 6.208 per cent compared to 6.193 per cent late on Friday.

    The rate had gone up to almost seven per cent earlier this year as investors worried over a default.

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    The Greek debt problem has caused a deep crisis in the European Union and eurozone, and has caused the euro to fall.

    The EU agreed on Thursday on an unprecedented contingency plan which would involve the International Monetary Fund [IMF].

    Under the plan, Greece can request combined EU-IMF help as a last resort if it fails to find reasonable interest rates on the bond market to finance its ballooning deficit and debt.

    The interest rate Greece must pay to borrow on the international bond market fell after the EU deal was announced.

    George Papandreou, the Greek prime minister, has insisted that his country can clean up its fiscal house on its own but that it needed backing from the EU to ease pressure on the bond market.

    The government launched austerity measures at the beginning of March which include pay cuts, a sales tax rise and a freeze in public and private sector pensions in order to reduce a public deficit that reached 12.7 per cent of output in 2009.

    SOURCE: Agencies


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