Greece’s last stand

With Greece’s back officially against the wall and the sand slipping thru the hour glass of fiscal stability, their government said they will speed up the privatization process. This is their last stand against an extension of the payback of their obligations but it won’t be enough. The WSJ is saying the government wants to raise as much as 5.5b euros by yr end ’11, up from an initial goal of 2-4b euros they had a few weeks ago. On top of this they want 6b euros more of budget cuts. This still won’t get them to the 30b euros of extra money they need but Greek bonds are rallying after yesterday’s sharp selloff and Greek stocks are higher. After one ECB member said last week that a Greek restructuring would be a “catastrophe,” another today said it would be a “horror story.” Oh the hyperbole but nothing will be pretty about what comes next for Greece. In addition to the rally in Greek bonds and stocks today, the better than expected German IFO business confidence # has the euro bouncing somewhat vs the US$.

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