While the markets are rightfully focused on tomorrow’s Greek parliamentary vote on a new austerity program, another crucial meeting will be conducted that could also have large ramifications for the European sovereign debt crisis.
Several of the largest banks in Germany are scheduled to meet with finance ministry officials Wednesday in Berlin to consider the proposal put forth by French banks yesterday, according to a Bloomberg report citing two people familiar with the discussions. The French proposal involves rolling over a portion of maturing bonds to help prevent a Greek default.
The report noted that “While the French proposal is serving as a framework for talks between the German companies and government, other options may also be discussed, the people said. The German government has shown reluctance to provide incentives to banks to roll over their Greek holdings, while the firms are concerned about the reaction of rating companies, as well as the legal and accounting implications of any agreement, the people said.”
While euro zone policymakers are hoping a roll over of Greek debt would avoid a default, at least one rating agency disagreed. Fitch Ratings announced on Tuesday that it would likely place Greece in default if the European Union (EU) proceeds with plans in which private investors roll over their Greek bonds.
David Riley, Fitch’s London-based head of sovereign ratings, wrote in a letter in the Financial Times today that “Fitch would very likely view such a scenario as a sovereign-default event and place the Greek sovereign rating into restricted default.” Riley contended that excessive attention is being focused on attempting to avoid a default.
“It is surprising and unfortunate that so much effort appears to have been invested in circumventing a particular rating outcome,” Riley continued. “By far the most important and beneficial outcome for Greece and its creditors is securing a credible solution to the current crisis.”
Despite the ongoing uncertainty, the euro currency rallied against the U.S. dollar for the second consecutive day, by 0.7% to 1.4339 in morning trading.
Sunridge Gold Launches Drill Program at Besakoa
- The geological environment at Besakoa has strong similarities to the Company's Asmara Project in Eritrea where the Company has been successful in defining large amounts of copper, zinc and gold in a series of volcanogenic-massive-sulphide (VMS) deposits.
- The same exploration techniques used on the Asmara project were used to define the drill targets at Besakoa and Sunridge management believes that the Besakoa project may represent a new emerging VMS district.
- The initial drill program will test nine high priority VMS-style targets which have been defined by Sunridge using airborne and ground geophysical surveys soil geochemical surveys, geological and structural mapping, and VMS gossan prospecting.
