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Greece in immediate danger of bankruptcy

08 June 2009 / 14:06:24  GRReporter
2386 reads

Stoil Topalov

The Greek government next has the task of explaining its economic plans to the European Commission – as the Greek Finance Minister travels to Brussels next week. On the agenda is the worrying fact that the government needed to borrow over 54 billion euro to pay public sector salaries, pensions, and to pay off interest on previous loans. This has confirmed what the EC has long suspected – that the country is in immediate danger of bankruptcy. Except the issue of raising funds for the government, a possible reduction of the public sector is also set to be discussed.

10 Greek companies have found their way into the Financial Times 500 largest European corporations. These are OPAP – the lottery games and betting company – in 158th place, the National Bank of Greece in 180th place, OTE – the Greek telecommunications company – in 182nd, Coca-Cola Hellenic Bottling Company in 257th, DEI – the electricity company in 302nd, Eurobank in 374th, Marfin Investment Group in 376th, ELPE – a petroleum company – in 385th, Alpha Bank in 401st place and Pireaus Bank in 470th place. Royal Dutch Shell tops the list, with Nestle in second, BP in third and Roche in fifth.

The European Central Bank said Thursday that a further contraction of euro-zone economies is expected before the end of 2009, and full recovery by mid-2010. GDP growth in the area is expected at around -4.1% and -5.1% in 2009, and -0.4% and 0.4% in 2010. A lot of headlines this week were due to GM’s bankruptcy. The company will close 12 plants and sell of landmark brands like Pontiac, Hummer, Saturn and Saab, costing a total of 21,000 workers their jobs. GM’s European brand – Opel has gone to the German government, which has promised 4.6 billion euro in government loans.

          Stock markets around the world had a rocky week, but still managed to come out with marginal gains. The Dow Jones rose 1.8% this week, closing at 8763.1 points, despite news of GM’s bankrupcy. The FTSE 100 struggled for any real gains this week, closing the week with a 0.8% loss, at 4437.5 points. It was more or less the same for the Athens stock exchange, which had a week of mixed results, finally closing Friday at 2372.2 – a 1.2% weekly gain.

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