Tradervox.com (Dublin - Greece has finally won a much needed second bailout after the European governments squeezed compromises from the private investors and shielded the eurozone from a possible default by tapping into the ECB’s profits. The Finance Ministers have awarded Greece 130 billion-euro bailout aid. They also developed a central-bank profit transfer plan. In their bailout plan, the Finance Ministers have forced investors to provide more debt relief in a debt-swap program aimed to push Greece past its March debt repayment deadline. Yesterday trading was marred by speculation of the outcome of the meeting making the euro to lose and gain value against major currencies.
However, there are those investors who believe that the bailout has not solved the Greece crisis and more needs to be done to make sure that the plan is implemented. Bondholders have are skeptical about the swap, and Greece’s capability to tolerate more austerity as well as the numerous approvals by the parliament have created an anti-bailout mindset which is seen as a potential risk to the attempts made to salvage Greece.
The current bailout brings a total of 386 billion euros spent in attempts to salvage Greece, Portuga, and Ireland from a possible bankruptcy. These efforts are seen as attempts to save the 17-nation currency from collapse as the debt crisis in those countries would have brought down Italy or Spain.
The agreement had earlier pushed the euro by a 0.4 percent increase against the dollar before paring amidst speculations that the agreement will not solve Greece crisis. This has been sparked by the realization that some investors may fail to sign the accord. Greece needs at least 90 percent of the investors to sign the accord or be forced to use force to secure the deal. If this happens, the agreement would run to legal difficulties which would further complicate the issue in the region.
Another challenge for Greece is to enact the austerity and economic reforms which could be difficult amidst the prolonged recession in the country and the risk of social unrest following the upcoming elections. Further, the IMF is yet to decide how much is willing to contribute to the bailout plan.
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