Europe agrees to give $17 billion to Greece

A demonstrator waves a flag in front of the Parliament building in Athens, Greece.

Steve Chiotakis: It's good news and bad news for Greece today. Europe agreed to $17 billion more in bailout money to stop Greece from defaulting. That's good. But it could go bust in as little as a couple of months. That's bad. From the Europe Desk, Stephen Beard reports.

Stephen Beard: Greece needs a second bailout. But there's a problem. The Germans -- who would pick up much of the tab -- are insisting on a condition. They want the investors who bought Greek government bonds to share some of the pain. So a plan has been developed: after intense negotiations some bondholders have -- voluntarily -- agreed to delay cashing in some of their bonds. Seems fine right?

Well not according to the ratings Agency S&P. Julian Pendock of Senhouse Capital says S&P has just ruled that this agreement is not voluntary.

Julian Pendock: There's been a lot of arm twisting behind the scenes. It is involuntary. And therefore counts as what they would call a "credit event." Technically they are saying it counts as a default.

And if Greece defaults, every Greek bank could go bust -- and as early as September.

In London, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.


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