Europe was plunged into fresh market turmoil as this week’s visit by Greece’s creditors rekindled concern the currency union will splinter and the first call for bailout aid by a Spanish region caused borrowing costs to surge.
Stocks and the euro fell before the arrival in Athens tomorrow of Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund. In Spain, Catalonia joined a list of the country’s regions that may tap aid from the central government in Madrid, spurring Spanish 10-year yields to surge above 7.5 percent for the first time.
“If Greece doesn’t fulfill those conditions, then there can be no more payments,” German Vice Chancellor Philipp Roesler told broadcaster ARD yesterday, adding that he is “very skeptical” Greece can be rescued and that the prospect of its exit from the monetary union “has long ago lost its terror.”
Greece is due to make a 3.1 billion-euro bond payment, mostly to the ECB, in August, a challenge that euro-area officials have said won’t be an issue, while so far declining to specify how they’ll ensure the bond redemption gets paid.