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Markets expect Greek default: poll

13 may 2011, 18:11
Opinion on financial markets overwhelmingly takes the view that Greece will default, a poll showed on Friday, AFP reports.

A poll by the Bloomberg financial information group found that of 1,263 investors, traders and analysts surveyed this week, 85 percent think that Greece will probably default and that Portugal and Ireland will de likewise.

"All these countries will go bust at some stage," said Wilhelm Schroeder, a manager of Munich-based Schroeder Equities GmbH and a poll participant.

"I just can’t see a scenario in which these countries get out of their debt problems," he said in comments in the survey which was published in the form of a statement.

The findings contrast with repeated assurance from EU and Greek officials that Greece can cope with its debt and repayments.

The Bloomberg poll statement said: "The pessimism underscores how investors remain unconvinced that European policy makers can prevent the euro-area’s first default even as they look to beef up Greece’s 110 billion-euro rescue package ($156 billion)."

The price of credit default swaps, or insurance costs against a Greek default, shot to a record high level this week as investors increased their outlook that the country won't be able to repay its debt, the statement noted.

Some investors took the view that a debt restructuring was the only solution for Greece.

"Ireland, Portugal and Greece will probably all need to restructure," said James Shugg, a senior economist at Westpac Banking Corp. in London who also took part in the survey.

"They are continually going to need more and more bailout funds, and at some point the decision will be made to draw the line and get creditors to participate."

But European policymakers have excluded restructuring of Greek debt, saying it would have disastrous consequences for the country and would hit the entire eurozone.

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